The infamous JET charity run by Mohammed Sharief on Normanton Road finally went bust in September 2016 with no money left in the bank, and owning negligible assets. This was a totally predictable situation, as this extract from my February 2016 article confirms titled : “JET: Nail-biting times for Sharief – can they keep paying his £60k pa rent?”
“The most significant piece of financial self-flattery is JET’s balance sheet. At first glance, it can be read that JET has reserves of £331k; a healthy position one might think. However, £328k of this relates to the improvements made to the Normanton Rd property which is NOT owned by JET, and therefore is NOT an asset of JET. It is owned by the Sharief family – it is their asset, sitting proudly on JET’s balance sheet. The reality is that JET only has reserves of ~ £3,000…which makes it a very fragile charity.
The failure of JET to have obtained any one of the “fringe” grants above (see original article for details) would have made it insolvent….and by now, in 2016, it is must be constantly flirting with liquidation.
JET’s policy is to hold 6 month’s worth of running costs in reserves. This amounts to ~£200k – so, with reserves at £3k, they have buffer of about 1 week, not 6 months. A case of chronic financial mis-management. Sharief has bled JET dry….
Despite this predictably, dire situation, JET still managed to pay its employees an additional £32k in the year, and employ 2 extra people.”
This is precisely the situation that the liquidator found in their report dated 5 October 2016. JET had a book value worth of £328,564, but expected that it could only realise £3,200 in cash to pay creditors. As the liquidator pointed out in her report:
“Leasehold property improvements has a net book value in the March 2015 accounts of £327,706…The estimated to realise value is NIL, as the improvements cannot be removed from the building and sold”
The owner of the building and the beneficiary of the enhanced property value? – Chief Exec – Sharief. Funded by £400k of public money. A very dubious situation and one which he exploited by charging his own charity £60k pa rent.
When JET went bust, it had 7 employees. 2 of them earning around £50,000 pa ( One of which was Sharief). The next highest paid employee was Habib Sharief ( son) on ~ £20,000 pa. The remainder being on ~£15,000 and less. It was certainly a case of a very top heavy organisation.
As JET’s cost base was essentially salaries, and rent totalling ~ £20,000 per month it needed to be constantly bidding on new projects to sustain this high cost burden. Even though it was clear that the business was not sustainable in February 2016, and a radical restructure necessary, they continued to take money from the public to keep themselves afloat.
March 2016 – Big Lottery – Local Sustainability Fund – 12 month programme £90,000
June 2016 Groundwork Nottingham – Talent Match £5,000
July 2016 Nat West – Skills and Opportunities Fund – 18 month programme £15,000
All of which had gone by the end of September 2016, and now seems to be irrecoverable. Although I am sure the liquidators and the funders may take a view on whether further action should be taken.
What now for JET and Sharief?
The building on Normanton Road is being used by Hamaari to provide jobs advice and support, albeit without the £50k pa salaries. This is a handsome asset for Sharief, largely paid for by public grants.
In anticipation of JET dissolving, the Sharief family incorporated a new company called somewhat ironically “Genesis Group” – the 4 family members are directors and shareholders, with share capital of £4. Its purpose “Construction of domestic buildings / Pre-primary education”.
How will they survive now that the family is not taking £100,000+ pa from this local charity?
CLICK HERE , for all previous article by Derby News on this most infamous of local charities
Categories: Charity issues