Marcela Trust 2018: not much charity, property speculation not working out

Dear reader, if you are still perusing my analyses of the accounts of the Marcela Trust (spending Octav Botnar's squirreled-away cash on trustee salaries and property speculation for a good number of years) then I can only admire your fortitude as I offer up this analytical tidbit based on their 2018 accounts.

Background for the casual observer: the Marcela Trust is sitting on about £80 million of money from OMC Investments Limited, founded in 1971, which seems to be from the former Nissan UK. Although a registered charity, they seem to be a bit tight with their charitable spending. In 2017, they spent £12K on charitable donations and £300K on trustee remuneration. Obviously this was a one-off, and we can expect 2018 charitable spending to resume at appropriate levels.

You know what's coming, don't you?

The Marcela Trust spent even less on charitable activities in 2018 compared to 2017: £11.5K instead of £12.2K. In practice, that's the same £7.5K grant plus a bit less auditor fees. Their spending on trustees was still around £300K, with a steady £225K going Mrs Dawn Pamela Rose (presumed family motto: "payment by results is for suckers!").

Again, this level of payment might be justified if the trustees' shrewd investment strategies in commercial property were paying off. Sadly, their fixed assets (mostly commercial property) took a hit of nearly £8M in the past year - that's nearly 10% of their total funds wiped out in one year. And this in a 10 year property bull market. Great job, guys. What happens when the next recession hits?

I repeat my observation from last year: this does not look like a charity. If I were the Charity Commission, I'd be asking some very pointed questions about the past few years' spending.

CASH / CASSH 2017 and the importance of attracting funding

Both my regular readers will recall my personal crusade to investigate the Marcela Trust and why UK "charities" such as "Consensus Action Salt for Health" (CASH) and "Action on Sugar" (different branch of same charity) are being funded to stop people eating bacon.

As part of this ongoing investigation I downloaded CASH accounts for 2016-2017 from the UK Charity Commission website. Saved a copy as well for future reference. The TL;DR:

• Rebranded to Consensus Action on Salt, Sugar and Health (mission-merged title, happened some time after April 2016);
• Notes that they're associated with charity Blood Pressure UK featuring long-time CASSH reps Katharine Jenner and Prof. Graham MacGregor (and they accidentally mis-cite the charity number, it's 1058944 not 1059844);
• Blood Pressure UK burned through 30% of their funds in year-end 2017 (£210K to £140K) so it's anyone's guess how long this venture will last without a cash infusion;
• CASSH brought in £50K in 2017 - down from £215K in 2016 - and spent £250K in 2017 - up from £153K in 2016. So they're down from just over £750K in funds to a bit over £560K. This doesn't seem very sustainable long-term
• Basically, no-one is giving CASSH any significant amount of money. Tragic, really. I'd imagine that the general choke-off in government funds to "charities" is starting to bite.
• About half their expenditure is in food salt/sugar surveys; seems that those surveys aren't translating into funding for action. No-one cares about what they find.
• In summary, CASSH is going to run out of cash in the next 3-5 years unless they can find a charity or government agency with reasonably deep pockets to fund their surveys

Great quote from their annual report:

Andrea Martinez-Inchausti told attendees [of the CASH reception at the House of Commons, sponsored by Sir David Amess MP] that BRC members, such as Tesco and Waitrose, are committed to salt reduction but following initial reductions, further reductions in salt are posing a technical challenge.

Let me guess: no-one wants to eat food with near-zero salt?

In fairness, I'd note that a key difference between CASSH and the Marcela Trust is that the latter sends large chunks of its finances to a few directors in remuneration, whereby CASSH at least has the decency to avoid hosing money at its trustees. (I'm curious about where in detail the £120K of survey cash goes, but have no reason to believe it ends up in CASSH trouser pockets).

Ah, CASSH. It seems that trying to reduce sugar and salt consumption in the UK, or indeed world-wide, is very much a minority interest and not one than people are prepared to back with significant quantities of their own money. I'm sure people talk a good game, but their revealed preferences in funding show that they don't actually care. Sorry guys!

Marcela Trust 2017: where's the charity spending?

In my vast fields of free time, dear reader, I scour the accounts of the Marcela Trust so that you don't have to. The accounts for 2017 make interesting reading.

Long story short, the Marcela Trust is steadily burning through the money from OMC Investments, which in turn came from the wind-up of Nissan UK. As of the start of their 2016-2017 financial year they had £86 million; after a bunch of losses on the property market they were left with £81 million at the end of the year. This doesn't seem like a wonderful record for the year for their five trustees:

• Jeanette Franklin MBE (of the Nuffield Orthopaedic Centre, MBE for fundraising for them)
• Dawn Pamela Rose (Marcela Trust stalwart)
• Brian Arthur Groves (Marcela Trust stalwart)
• Mark Robert Spragg (Marcela Trust stalwart)
• Paul Hotham (conservationist, also of Flora and Fauna International which has graced these pages in years past)

and yet the indications are that the trustee remuneration wasn't that much reduced from 2016 accounts. Dawn Rose trousered about £200K in total compensation (down from £270K last year) and Brian Groves got £80K rather than £100K last year. We don't know directly about a couple of the other trustees as they are paid out of a subsidiary company, but the pattern we can see is about a 20% payment reduction from 2016.

Now, the natural temptation is to ask the trustees how they can justify their salaries based on a £5 million loss over the year, but that's not fair - the value of investments can go down as well as up. We should evaluate them on how they manage the charity's spending on charitable causes - after all, that's what a charity is all about. And the accounts note specifically that the trustees do not actively fund-raise - although why they recruited someone with an MBE for fund-raising as a trustee is a bit of a mystery.

The Marcela Trust charity spent a bit over £12K on charitable activities in 2017. Last year it spent £4.8 million - but then, it got £4.75 million in donations.

One is left (per William of Ockham) with the hypothesis that the Marcela Trust trustees view their job as spending the minimum of money on charitable causes that they have to, while personally benefiting from the slowly diminishing OMC assets. I certainly don't know how they can look at this year's figures with a straight face and claim that they should be paid anything beyond a nugatory amount for their efforts.

The theme emerging from the last few years is that someone on the trustees is using the OMC funds to build a steadily growing property empire: among other investments, The Queen's Head Hotel ("QHH Limited"), the Old Post Office in Leeds, something referred to as Greyfriars Colchester which I assume is the eponymous luxury hotel, and now Castel Salbek which "acquired a property in Transylvania which is proposed to be developed into a small luxury hotel." What is a UK-based charity doing investing in a random small hotel in Transylvania? Your guess is as good as mine, but it doesn't seem to be a core focus for the charity, which makes me wonder which trustee has directed this investment, and how they (or their friends) expect to benefit from it.

If I were the Charities Commission, I think I'd be looking over the past few years of accounts and starting to ask some pointed questions about how exactly this entity is behaving as a charity in terms of fundraising for and investing in charitable causes, as opposed to being just a vehicle for speculating in (mostly hotel) property.

Marcela Trust update: 2013 accounts

The Marcela Trust has sent in their accounts for their fiscal year ending July 2013 so I thought I'd take a look to see how our favourite salt and sugar haters are doing. For comparison, have a look at my analysis of their 2012 accounts.

A quick summary:

• Their donations this year were £300K to the Camelia Botnar Foundation, £170K to Fauna and Flora International (like last year, for their Western Transylvania work and to fund their student at Cambridge), £20K to the Nuffield Orthopaedic Centre and £7.5K to support the annual exhibition of the Society of Portrait Sculptors; these were funded in the usual way by restricted donations (totaling just under half a million quid) from OMC Investments which holds all the money that the Marcela Trust distributes.
• Nothing was sent to CASH or Action on Sugar this year; perhaps the Marcela Trust trustees are not keen on the attention they received as a result of the CASH donations.
• The 300K donation to the Camelia Botnar Foundation is interesting; I wonder what it was for? I looked at the Camelia Botnar Foundation 2012 accounts back in December and they looked in reasonable shape; their net funds had jumped from £5.1M to £6.3M. So was the 300K for something specific that the Marcela Trust wanted to set up but not fund directly? If so, what? The Marcela Trust report says that it "was made contribute [sic] to the foundation's annual running costs." We'll have to wait until December to see how this materialises in the CBF accounts and why it was needed.
• This year the Trust got £2.5K in donations and £22K in interest on funds, comparable to last year. They raised £5.6M (property rentals, hotel operating income etc) but spent £6M doing this, which is rather surprising; last year they raised about the same at a cost of only £3.7M. Where did they lose the extra £2.3M or so? Looking at the subsidiary activities trading costs, it looks like that was mostly due to extra impairment of investments (things they have are no longer as valuable as they used to be).
• Their funds had an OK year, rising £1.5M in value to £67M, about a 2% gain.
• They sold £3M of investment assets (property, presumably) but lost another £1M on revaluation of assets they held; this wasn't quite as bad as last year's £1.5M loss but must have still smarted a bit.
• They moved about £24M from investment assets to cash, nearly a mirror of last year's move of £24M cash to tangible assets (after raising £12M in loans); that loan is still outstanding in the creditors line, now due within 1 year.
• Fortunately the poor investment performance didn't stop the Trust increasing its wages paid. Wages were up about 6% overall and pensions about 19%. Dawn Pamela Rose was paid about £250K again, with £58.5K going into her pension scheme (up from £40K last year).
• Dawn Pamela Rose's QHH Limited subsidiary of OMC Investments commenced trading as a hotel during the previous financial period; it lost £15K on turnover of £1.1M this year.

I think QHH Limited must be the Queen's Head Hotel (Google is fairly definite on this link) but I'm not sure which of the eponymous establishments in the UK corresponds to this.

So overall a year which is interesting mostly for the sudden arrest in the flow of funds to CASH, a property investment performance which looks less than stellar, and a £300K donation to Camelia Botnar Foundation which did not look to be needed. Let's see what the CBF accounts reveal when they appear in December...

Dodgy assertions from CASH's head medic

The salt-haters have been praising the reduction in dietary salt for an important role in the 42% fewer stroke fatalities and 40% drop in those dying from coronary heart disease:

The researchers, who include Britain's leading campaigner against added salt in food, claim that diminishing levels of salt was "an important contributor" to falls in blood pressure over the eight-year period. "As a result, the decrease in salt intake would have played an important role in the reduction of stroke and ischaemic heart disease mortality during this period," say the authors.

"Would have played"? That's a funny way of saying "was shown at a 95% confidence level to have played"... Co-author Graham MacGregor is the chair of CASH; his daytime job is Professor of cardiovascular medicine at the Wolfson Institute of Preventive Medicine at Queen Mary. So surely we can expect a rigorous and impartial analysis of the data from him.

If I'd been looking to prove or disprove this assertion, I'd have looked at stroke and heart disease rates in a range of patients over this time frame, where I had some objective measure of salt in their diet (urine samples), and looked to see whether patients with lower salt levels (in a group of patients with otherwise similar exercise, age, gender, racial stats) were correlated with lower stroke and heart disease rates. Is this what they did?

Patrick Wolfe, professor of statistics at University College London, took issue with the authors for assuming that the improved blood pressure seen in the 2003-2011 was largely the result of reduced salt intake. "Plausibility of assumption does not equal evidence," he said.

Oh. Apparently not, then. That's a piss-poor basis for the claims CASH (and international co-conspirator WASH) have been touting around about salt reduction. As commentor ID4968047 notes this reduction in strokes and heart disease could equally have come from the reduction in smoking in the past 10 years - the obligation is on Prof. MacGregor to show otherwise. Looking at CASH's writeup of the paper (the link to the paper isn't available yet, looks like) they say:

Confounding factors that were looked at include age, gender, ethnicity, education, incomes, alcohol consumption, fruit and vegetable intake and BMI.

Exercise and smoking are not mentioned. Nor do they reference the increase in statin use - and indeed Aseem Malhotra from Action on Sugar claims that statins are harmful and don't reduce mortality which is interesting as they seem to be a prime competitor to CASH/Action on Sugar's crusades against sugar and salt. Malhotra's claims got panned for lack of evidence by Prof. Rory Collins from Oxford.

It seems that others in the medical stats community have doubts too:

David Spiegelhalter, professor of the public understanding of risk at Cambridge university, cited the researchers' admission that the fall over that time in systolic blood pressure would be expected to reduce strokes by just 11% and heart attacks by 6%, small amounts of the total falls. [my emphasis] Reduced blood pressure did not represent the authors' claimed "substantial contribution" to the reduced death rates.

This is not to say that Graham MacGregor is obviously wrong in his claims. They might be true but it is a real reach to claim that this study supports them. And if this is the best he can do, I'd suggest the Marcela Trust / OMC Investments crowd who are backing CASH find someone with a better stats background to organise their crusade against salt and sugar.

Update: just managed to dig up the link to the full text in BMJ Open. From a quick look the focus was on linking salt reduction with BP reduction but not explicitly with stroke/CVD reduction.

The authors themselves admit:

It is likely that several factors, that is, the fall in BP, total cholesterol and smoking prevalence, the reduction in salt intake and the increase in the consumption of fruit and vegetables, along with improvements in the treatments of BP, cholesterol and CVD, contributed to the decrease in stroke and IHD mortality.

They have a stab at isolating the effect of salt by casting tea leaves:

it was estimated that a 2.7 mm Hg reduction in systolic BP that occurred with salt reduction would be predicted to reduce stroke by approximately 11% and IHD by 6%.

but even then the 2.7mmm Hg reduction figure they quote is the net over 8 years including factors such as decrease in smoking and increase in statins, so to attribute it to just salt reduction is "optimistic". They appeal to studies in Japan and Finland in the late 60's / early 70's but the huge gaps in time, diet and environment between now and then render the comparison unconvincing. If that's the best argument they've got to offer, I'd hate to see the ones that didn't get selected for use in the paper.

The conclusions are what kill the paper for me:

The reduction in salt intake is likely to be an important contributor to the falls in BP in England from 2003 to 2011. As a result, the decrease in salt intake would have played an important role in the reduction in stroke and IHD mortality during this period. [my emphasis]

That's a terribly weak conclusion even to my relatively untrained eyes. If they could state this more strongly, they would. Instead, they reserve their strength for polemic:

... the mean salt intake in England (8.1 g/day in 2011) was still 35% higher than the recommended level of 6 g/day, and 70% of the adult population (80% men and 58% women) had a daily salt intake above the recommended level.[14] Therefore, continuing and much greater efforts are needed to achieve further reductions in salt intake to prevent the maximum number of stroke and IHD deaths.

Reference 14 doesn't justify the 6g/day level, it's just a measurement of sodium levels. The authors don't make any reference I can see to why the recommended level should be 6g/day and not (say) 10g/day or 3g/day. If you're appealing to magic figures in your conclusion it doesn't give great confidence in the rest of your article.

Action on Sugar - the revenge of CASH

I've been vaguely following the UK War On Sugar, but not paying much attention. However, Simon Clark at Taking Liberties spotted that Action on Sugar have more than a passing connection to our Marcela Trust funded friends at CASH:

The [actiononsugar.org] link takes you to the website for Consensus Action on Salt and Health (CASH) so when Action on Sugar say "staff share other research projects" I imagine that's what they mean.

And indeed, here's the relevant "whois actionsugar.org" information:

Domain Name:ACTIONONSUGAR.ORG
Created On:02-Oct-2013 15:03:20 UTC
Last Updated On:02-Dec-2013 03:45:39 UTC
Expiration Date:02-Oct-2015 15:03:20 UTC
Sponsoring Registrar:eNom, Inc. (R39-LROR)
Status:CLIENT TRANSFER PROHIBITED
Registrant ID:8259a6739c6b982d
Registrant Name:Katharine Jenner
Registrant Organization:Consensus Action on Salt and Health
Registrant Street1:Wolfson Institute; Charterhouse square; Queen Mary Universit
Registrant Street2:London
Registrant Street3:
Registrant City:Queen Mary University of London
Registrant State/Province:London
Registrant Postal Code:ec1m 6bq
Registrant Country:GB
Registrant Phone:+44.2078826018
Registrant Phone Ext.:
Registrant FAX:
Registrant FAX Ext.:
Registrant Email:cash@qmul.ac.uk

Back in 2012 I probed into CASH which turned up the Marcela Trust as a funding source. What's happened in the past year?

CASH's 2012-2013 report drops hints that their interests are broadening out from salt to include sugar (sugar-sweetened beverages in particular) and saturated fats. Their registered charity number is 1098818 which let me find their end of 2013 accounts:

• CASH doesn't seem to be very popular in terms of public donations, and their finances aren't looking that good: total income for the year was £141,335 (2012: £261,590) and expenditure was £140,490 (2012: £169,750)
• OMC Investments Ltd (proxy for the Marcela Trust) gave them £200K in 2012, but only £100K in 2013. Perhaps they didn't like the publicity that they got last year... Note that they're still 70% of CASH's funding.
• The rest of their income is made up of donations (4k), interest (17K), fund generating activities (17K) and "other" (2K). Their interest is basically 2% on £880K of funds.
• The British Heart foundation gave them 30K in 2012 but nothing in 2013.
• CASH shifted 300K of cash into long-term investments during the year.

Looks like CASH can run for a few years on their reserves, but without continuing OMC (Marcela Trust) investments, they're screwed.

actiononsugar.org domain registrant and nutritionist Katharine Jenner is quite the campaigner:

Katharine is a Registered Public Health Nutritionist and the Campaign Director of the award winning salt reduction charity CASH (Consensus Action on Salt and Health) and its international arm WASH (World Action on Salt and Health) [...] Katharine worked as a media strategist for several years and as such is very interested in developing innovative approaches to communicating public health.

Specifically, banning salt, sugar, and who knows what else...

I wondered how CASH got their 880K in funds so I dug back a few years.

• In 2009 they went from 200K to 370K via 240K in "voluntary income" which include 200K from OMC.
• In 2010 OMC pitched in another 200K, and the British Heart Foundation 90K
• In 2011 OMC pitched in 200K and the BHF 60K.

One is left with the inescapable conclusion that CASH (and hence actiononsugar.org) is principally a lobbying arm of the Marcela Trust, funded through OMC Investments. Don't put sugar in the tea you offer Dawn Pamela Rose from the Marcela Trust, she'll tell you that she's sweet enough.

Camelia Botnar in 2012

I've just spotted that the Camelia Botnar foundation accounts for 2012 have appeared on the Charities Commission website, so I thought I'd take a quick look to see how they are doing. See my notes on their 2011 accounts for the previous context.

Some of the highlights: for context, remembar that Camelia Botnar Ltd. (CBL) is the commercial arm, and Camelia Botnar Foundation (CBF) is the charity.

Trustee Natasha Malby retired in 2012, as she did from the Marcela Trust as well.

"The Foundation has forged links with a foundation in Transylvania with a view to starting a programme of skills and culture exchange visits." This matches the Marcela Trust activity donating £170K to fund "specific Community initiatives in the impoverished Zarand area of Western Transylvania". The CBF and the MT seem to be clearly aligned in their overall direction, which shouldn't surprise us given the personnel overlap.

OMC Investments randomly donated a carpet.

CBL donated £152K to CBF, nearly twice last year's figure. CBL brought in about £750K of income, similar to last year. They improved performance primarily by reducing cost of sales by nearly £100K, about 15%.

The OMC endowment fund was pretty static, value of investments was up 3%

CBF had about the same expenditures overall as last year, but income was about £200K lower, primarily due to a drop from £300K to about £0K in voluntary income.

Investment performance was much better for the year, up £1.3M as opposed to last year's £1.7M loss. The FTSE went from to 5495 to 5958 that year, so it looks like they rode the wave up reasonably well.

Net funds went up from £5.1M to £6.3M, presumably in anticipation of some spending in 2013.

Wages and salaries were pretty flat, and they had 3 fewer charitable activities staff (from 48).

The investment properties took a bit of a bath, down about 8% from the beginning of year evaluation (£9.2M). As I noted last year: "After last year's near-£3mm loss on revaluation, one wonders how well this will continue to perform..." "Not that well", apparently.

Overall a "steady as she goes" year. Looks like CBF has stabilized after last year's ramp-up on charitable activities staff. As long as their investments continue to perform, they're pretty stable. One hopes that they won't try any more property investing though.

Marcela Trust accounts for 2012

Distracted by other blogging, I was negligent in failing to notice that the Marcela Trust had posted their 2012 accounts back in March. You can read the results of my previous investigations of the Marcela Trust and friends at your leisure.

Interesting points from the accounts:

• Natasha Malby resigned as a trustee on 6th October 2011. I wonder why?
• They're still with Spofforth's as accountants, and still HQ'd at 14 Buckingham Street. I actually dropped by that address a couple of months back; the doorbell panel indicates that as well as the IPPR (who presumably take up a floor or two of the building) there are a veritable host of small organisations at that address, e.g. the rapacious capitalists at investment firm Dawn Capital.
• They donated £100K to the anti-salt campaigners at CASH, which donation seems to have been passed straight through the Marcela Trust from OMC Investments Ltd.
• They donated £170K to Fauna & Flora International, registered charity no. 1011102, to "fund specific Community initiatives in the impoverished Zarand area of Western Transylvania and a Rumanian[sic] post graduate student at Cambridge University"
• That Romanian student appears to be Lenke Barint who graduated in the MPhil 2011-2012 class.
• The Marcela Trust carried forward £65M in its funds balance essentially unchanged.
• Current assets dropped from £11.8M in 2011 to £4.5M in 2012; tangible assets went up £20M to £77M; and amount owed to creditors went up from £200K to £13M to balance.
• Why did tangible assets jump by £20M? Because they spend £24M to acquire new tangible assets (freehold investment property) and raised £12M in loans - this sounds like they're speculating in property like the Camelia Botnar Foundation has been doing. I wonder how trusteee Mrs. Dawn Pamela Rose is involved in these acquisitions?
• Wages and salaries jumped from £570K to £854K for the same 4 people as in 2011. Since Natasha Malby resigned early in the year, her salary was negligible. Dawn Pamela Rose's salary was about the same. Brian Arthur Groves charged the Trust £89K for his services as a director. I wonder who else made up the remainder of the salaries?
• Dawn Pamela Rose's company QHH Limited appears in the accounts as a subsidiary with £1.1M turnover and 45% of that as gross profit - being more than wiped out by £622K of "administrative expenses and exceptional items", losing a net £69K for the year. I would really, really like to know what QHH Limited is doing with that money.
• Brian Arthur Groves was made a £200K loan, secured against his equity, with interest at 1% above BoE base rate; this amount is now down to £150K. Note that I've not rounded these numbers - according to the accounts they are exact.

Fauna & Flora international had £18.2M income and £17.3M spending in 2012, and has lots of eminent people as Vice Presidents. Of that income, about £4.3M came from trusts and foundations; this looks like a random donation, but I'd be fascinated to know what connection Lenke Barint has to the Marcela Trust trustees.

What does all the above tell me? The Marcela Trust is marking time, being used as a conduit for donations to charities by OMC investments, and using its substantial assets to speculate in the property market. It seems that being an employee or director of the Trust continues to be a well-paid gig, especially in relation to its level of charitable activity. I would love to know what QHH Limited is doing on behalf of the Marcela Trust - more, I'd like to get a job as admin staff for them as it seems to be quite the sinecure.

Camelia Botnar Foundation - less charity, more staff

[ New! An analysis of the 2012 accounts of the Marcela Trust. ]

Hurrah! The long-awaited 2011 accounts of the Camelia Botnar Foundation have appeared on the Charity Commission website. After our analysis of the 2011 accounts of Camelia Botnar Ltd., their commercial partner to which they give a whole load of manpower and loan a whole load of money, let's see what the charity was doing last year.

Main points of the accounts:

• they got 9 trainees to complete their placement and move into employment, down from 15 in 2010;
• the estate continues to suck up a fair amount of money in maintenance;
• they note that "Camelia Botnar Ltd [the subsidiary undertaking] sells horticultural products and crafts generated by the Trainees on the estate as well as other stock items purchased from third parties [...] The undertaking showed an increase in turnover this year on the previous year of 3.65% to £788,447 and a resulting gross profit of £103,109 (2010: £122,819). The profit was not as substantial as the previous year due to an increase in Administrative Expenses." which interests me - they add 30K of sales but lose 20K of profit, so that implies CBL admin expenses went up by around 50K. Which is a whole person's salary.
• Sarasin and partners continue to ensure that the investments underperform: they lost 10% on the investments over the year, compared with a FTSE All-Share Index performance of a 6.69% loss. Nice one, guys. They still trousered £101K in fees for this performance. I'll definitely consider you for my future investment management needs, assuming Dick Fuld isn't available.
• CBF is buying a "leisure investment in a market town" for £1,760,000, aiming to get a yield of 5.12% compared to the 1% that the cash is currently generating. Um. I can't see this going any direction other than horribly wrong. CBF is going way out of their core area in this activity. I wonder if Dawn Pamela Lawson has been advising them on this activity, what this "leisure investment" is and what "market town" is involved. Who sold them this entity and why do CBF think that a leisure investment in the middle of a UK recession is going to pay off?
• CBF took in £3.230mm and spent £3.233mm, a very carefully balanced year, in contrast to 2010 where they spent about 8% more than they brought in.
• They have managed to accumulate an extra £800K of cash, from £4.3mm to £5.1mm, which looks to be from spending £300K less on operating activities and receiving £500K of capital expenditure. I wonder what they're planning to do with this - more investment property acquisition?
• Most charitable activity costs were more or less static (+5%), though "support costs" more than doubled from £45K to £101K.
• Employees rose from 79 to 84, but that masked charitable activities staff jumping from 33 to 48, while actual manufacturing staff dropped from 45 to 35. So they're doing less, with more people.
• They're letting plant and machinery assets drop from £725K to £555K, which implies to me (along with the drop in manufacturing staff) that they're letting the manufacturing side run down.
• They had £7.4mm in investment properties at the start of the year and added the aforementioned £1.7mm leisure investment. After last year's near-£3mm loss on revaluation, one wonders how well this will continue to perform...

I find it significant that this year both CBF and CBL decided to ensure their income and expenditure were balanced within a fraction of a percent, in contrast to previous years. CBF is ramping up on charity staff but apparently letting apprentice numbers and manufacturing staff and plant drop. It seems to be undergoing an attack of bureaucracy, doing less with more. It's putting more money into property investment despite losing substantial amounts of money in past years. Its main investment fund lost 10% courtesy of Sarasin Partners.

The figures suggest that CBF is turning into a business of busily spending what remains of the investment fund on the estate and staffing, and doing less and less of its core work of preparing trainees for the world of employment.

Camelia Botnar Ltd - 2011 accounts

[ In which we look at Camelia Botnar Ltd's 2011 accounts and wonder how they continue to manage to turn only a small gross profit when their labour is free. We also note the continuing charitable donations to and interest-free loan from the Camelia Botnar Foundation and ponder on why they don't just net everything out. See Part 3 of the series for background.]

Camelia Botnar Ltd. (CBL) have just delivered their accounts for the year ending 31 December 2011. As promised, here's the analysis.

Key points:

• Compared to 2010, turnover and cost of sales were similar: 788K and 685K vs 759K and 636K, giving about a 4% increase in turnover but a reduction in gross profit from 16% to 12%. That's roughly what we'd expect if material costs were dominant rather than fixed costs.
• The entire operating profit plus a small amount of interest was wiped out by a charitable gift (89K), presumably to the Camelia Botnar Foundation in the same way that 2010 gifted most but not all of its profit (90K) to them. Note that this does not relate to the loan that CBF gave CBL, which still seems to be outstanding.
• Cash in hand dropped a little from 175K to 148K but still looks healthy.
• Amount due to creditors within 1 year was practically unchanged (180K). This is weird. It implies that the 180K of loans, nearly all (165K) from the CBF, was rolled over by a year. Why are they doing this rollover instead of extending the term of the loan over a number of years? Given a fairly steady business state, they're not going to be able to repay it next year without wiping out most of their cash in hand and donation to CBL; there's just going to be another roll-over. This looks like an artificial accounting structure to me, and I'd be fascinated to learn its purpose.
• Amount due to creditors beyond 1 year has dropped from 55K to 20K; the breakdown of creditors on page 7 implies they paid off about 35K of loan principal overall in 2011, 32K of which went to CBF.
• P+L account has remained static at 146K +/- 500 (due to 1K in tax paid in 2011). Looks like the CBL accounts are being carefully managed to balance out almost exactly neutral in profit. The 50K in share capital wholly owned by CBF is worth around 190K if CBL were wound up now.
• Tangible fixed assets dropped significantly, from 392K to 277K, due to 129K of disposals (near-matching depreciation on those assets). That looks like most of their TFAs are written off over 3 years, but for some reason they're not being replaced this year. Is this just a 1-year glitch, an efficiency measure, or are they actually anticipating scaling down operations?
• CBL continues to benefit from apprentices and supervisors from CBF working at no cost to CBL. And yet their profit margin continues to drop.

I'm now waiting for the Camelia Botnar Foundation accounts for 2011 to be scanned and uploaded by the Charities Commission. I'm itching to see how they're reporting their interactions with CBL. I'm also curious that their income of £3,230,568 is within 1% of their spending of £3,233,150; how have they managed this balancing act so well?

Marcela Trust part 3 - Camelia Botnar

[See Part 2 for the story so far. In this piece we delve into a charitable foundation and associated company, spend some quality time in the accounts and marvel at wage costs and profits. See Part 4 for the Camelia Botnar Ltd. 2011 accounts.]

Having established the provenance of the Marcela Trust money, I thought I'd dig into the companies and charities associated with it and its trustees. Top of the list were the Camelia Botnar Foundation charity and associated company Camelia Botnar Ltd.

Camelia Botnar Foundation - the charity

The Camelia Botnar Foundation is registered charity no. 277275. Their accounts for 2010 were received Sept 2011, so 2011's accounts should be along soon; I look forward to it. From the Charities Commission executive summary:

• Bulk of £2.8mm income is from investment (£2mm) and trading to raise funds (£760K) on £60mm of assets.
• Bulk of spending is "charitable activities" (£2.32mm) and trading to raise fund (£640K)
• 79 employees.

Here's a link to the Camelia Botnar Foundation 2010 accounts (980K PDF), let's see what's in there.

Trustees of the Camelia Botnar Foundation (hereafter referred to as "CBF" for brevity) are listed as B A (Brian Arthur) Groves, D P Rose nee Lawson (Dawn Pamela Rose), Dr M Lenz (Martin Lenz) and Miss N S L Malby (Natasha Sara Lara Malby). See my previous Marcela Trust post for details on these people. Of them, all but Natasha Malby are trustees of the Marcela Trust (and no other charities).

Main points from the primary accounting information:

• Camelia Botnar Ltd. is listed as a "subsidiary undertaking" - take note, this will be referenced later - and is hereafter referred to as "CBL" for brevity.
• The associated estate sucks up a fair amount of funds, which seems reasonable. OMC Investments Ltd. (q.v.) donated £100K for driveway resurfacing.
• A new (to me) entity is referenced - the OMC Endowment Fund which produced £5000 this year and £3220 last year, so my guess is that with a yield of a few percent the fund is about £100K in size.
• CBL turnover went up a few percent to £760K this year with gross profit 122K; this is over 16%, which isn't bad, but see the next point;
• CBL gifted 90K to CBF; CBF gives the workforce to CBL free of charge so it's not surprising they turn a good profit. I wonder where the rest of the money goes - materials? CBF had loaned 75K to CBL, which is repaying 20K this year.
• Their fund managers (Sarasin and partners) managed a 10% return on investments, compared to a 14.5% return from the FTSE All Share Index. I hope they didn't pay Sarasin much for a performance like that - oh look, £96.5K expense for Investment Management costs on £42mm of investments. That looks like a 2% annual fee. Nice work if you can get it. I'd stick them on a FTSE tracker and charge no more than 1%. The actual investment is 55% in UK equities, 40% in bonds and 5% overseas investments.

In the costs of charitable activities, establishment costs were £497K and staff costs were £1.5mm. 79 employees implies an average staff cost of 18K which seems about right; headline wages are 80% of this. 45 employees actually make things; the rest do "charitable activities" and 1 does "governance". The governance employee was paid £80-90K plus about £7K of pension contributions. Trustees were not paid. CBF holds £807K in the aforementioned OMC Investments Ltd.

So overall nothing inherently odd there. The most interesting point is that CBL receives 45 workers effectively free of charge (worth wages of about 700K, or nearly 100% of turnover), and still only manage to turn 20% gross profit. Is this because materials are the greatest cost? If so, it's a lousy business to run. CBF is paying 700K wages to CBL and only receiving 120K of profit (in various forms). So let's turn our attention to CBL.

Camelia Botnar Ltd - the company

Camelia Botnar Ltd is registered company no. 1646383. Directors are the aforementioned Dawn Pamela Rose, Natasha Malby and a new name Emma Louise Mitchell. With my curiosity piqued I ordered the 2010 accounts for this company from Companies House. They were brief, but confirmed the above numbers. However they were significant for the indications they gave.

Their debt is interesting. In 2009 they owed £100K to CBF; in 2010 this went to £165K. This is odd; their cash in bank and at hand has gone from £128K in 2009 to £175K in 2010. In other words they are keeping virtually all the loan as a cash float; net current assets are static around £175K.

What does their £759K turnover imply, if it all came from 45 craftsmen? About £15K of sales per craftsman. Their cost of sales was £636K - what was that cost made up of? Not craftsman wages, that's for sure. I presume it was almost all materials for sales - but 2009 turnover was lower and sales costs were higher, yet the steadily increasing cost of raw materials would have made us think that cost per sale would have risen in 2010. This has a whiff of peculiarity.

Tangible assets (plant and machinery) increased by 14K (36K additions minus 22K depreciation), stocks by 30K with a net book value of 79K.

I am extremely curious to know how their costs break down. What's their margin on their goods? Why is their profit margin so low given all the free labour and interest-free debt? What are they paying their directors, and in what form? Why aren't their sales being crimped by the recession?

Camelia Botnar Limited looks like a very inefficient business. It should be making a lot more money than it actually does, given the free labour that the Camelia Botnar Foundation supplies. I look forward to their 2011 accounts with which, dear reader, I shall regale you when they arrive.

Marcela Trust, part 2

[In which we meet the Botnar family, discover an unpaid £250mm UK tax bill, and find that hating bacon doesn't pay the bills. Now available: Part 3, where we take a look at the accounts of the Camelia Botnar entities. ]

Following my original post on the Marcela trust, Tim Worstall's repost occasioned several comments including a very helpful one from Vinny Burgoo:

I came across Octav Botnar, Marcela's husband, while trying to identify an associate of John Bloom [...] Botnar was the brains behind Nissan UK, which expanded rapidly then lost its import monopoly and was eventually found to have systematically cheated the taxman for a decade or more.

So I did a bit more digging to try to ascertain the source and intent behind the sudden £70 million donation to the Marcela Trust in 2010 and what the connection to CASH was.

The Octav Botnar story

Octav Botnar died in 1998 in Switzerland, owing the UK Inland Revenue about £250 million in unpaid tax. It seems that the Inland Revenue were bringing a court case against him, but dropped it when it became clear he was terminally ill. Former Nissan MD Michael Hunt wasn't so lucky, getting 8 years in chokey for his part in the frauds while financial director and company secretary Frank Shannon got 3 years.

The prosecution said the fraud started in 1976 and lasted 16 years. Bogus invoices and 'sham' shipping agents in the Netherlands and Norway were used to inflate the costs of shipping Nissan vehicles from Japan to Britain by as much as 50 per cent, to conceal an extra profit averaging pounds 115 on each car and van.
The money was laundered through a Bermudan company and secret Swiss bank accounts. The cash then disappeared into a black hole - the term used by tax investigators who have failed to trace a single penny.

Keen readers of my original post will remember the company "Camelia Botnar Limited" and the charity "Camelia Botnar Foundation" which are both interests of Marcela Trust trustees, including Dawn Pamela Rose whose company OMC Limited contributed the £70 million at issue. It seems that Camelia Botnar was Octav and Marcela's daughter, and was killed in a 1979 road accident, hence the foundation of the charity. Marcela Botnar seems to be still in Switzerland, working for the Fondation Botnar in Basel (Elisabethenstrasse 15).

This made me wonder more about the source of the money and whether there might have been any connection to Octav's original fortune. OMC Investments Limited was founded in 1970 but wasn't called OMC Investments Limited then: they were originally Datsun UK Limited, changing name to Nissan UK Limited in January 1984 and OMC Investments Limited in 2007. OMC Investments Limited now has £69 million of share capital, nearly all of which is owned by The Marcela Trust since it was gifted to them in 2010.

It looks to me as if all the value in Octav Botnar's original Datsun/Nissan UK company, headquartered in 14 Buckingham Street, Westminster, was transferred to charity The Marcela Trust, also headquartered in 14 Buckingham Street, Westminster and sharing at least one trustee/director (the aforementioned Dawn Pamela Rose).

The Trust itself donated £800K to charities in 2010 - 500K to The Nuffield hospital which seems to have a link to the late Camelia, 200K to bacon-hating CASH and 100K to "Open Eyes" in Lausanne, Switzerland (which seems to be the interest of trustee Dr. Martin Lenz). I suspect that it's not a coincidence that Octav Botner lived most of his life in Switzerland - perhaps he had eye problems, perhaps Dr. Lenz was a family friend. But why would The Marcela Trust donate all that money to CASH? What's the connection?

CASH - kept afloat by OMC funds

CASH staff are all in the field of nutrition and cardiovascular health. The 2010 CASH annual report makes it clear that it is primarily a lobbying organisation, organising the 11th National Salt Awareness Week (I must have missed the first 10 of them, how guilty do I feel) and bugging various national and international agencies about salt. It is a registered UK charity with no trustees common to the Marcela Trust network, and in FY 2011 it raised 283K from all sources and spent 113K on Salt Awareness Week and various surveys.. Interestingly the accounts note:

The funding from OMC Investments Ltd (the Marcella[sic] Trust) which comprises a significant component of the income will cease in 2011-2012 leaving a considerable gap in the charity's resources.

With very little money coming from actual people (262K of the 283K came from OMC and the British Heart Foundation), and appearing to be pretty much an anti-salt lobbying arm of The Marcela Trust, CASH is clearly deserving of a their Fake Charities label - and with luck their £800K in the bank will run out soon; they estimated 3-4 years with the current reserves.

Who's behind OMC and what are they doing now?

Mrs. Dawn Pamela Rose, director of OMC Investments Ltd. and trustee of the Marcela Trust, seems to be also known by her (maiden?) name Dawn Pamela Lawson in her role as a director of Camelia Botnar Ltd. The manager "D Lawson" to whom The Marcela Trust paid £240K seems to be she. I suspect that administrator "N Malby" (£24K) is Natasha Sarah Lara Malby (age 36) who is similarly a Marcela Trust trustee and director of Camelia Botnar Ltd. Natasha seems to be a bit young to have any involvement in Nissan before things went "foom"; I wonder how she got involved with the Trust?

Dawn is a director of company QHH Limited (registed number 07637088) which appears to be a newly formed (as of May 2011) company with as yet unknown purposes and cashflow since no accounts have yet been filed. Brian Arthur Groves of OMC and the Marcela Trust is a co-director, so this isn't just a sole venture by Ms. Rose. I note in passing that Brian is nearly 80, whereas Dawn is a sprightly 56 years of age. Brian's directorship history includes Nissan Plant and Industrial Machinery Ltd., Debretts says that he used to be a motoring journalist before becoming advertising, PR and marketing director for Nissan UK Limited until 1988 (that must have fun when the Inland Revenue came a-calling for his colleague Octav Botnar) and his given business address is... 14 Buckingham Street, Westminster. Shocker.

QHH Ltd. registered address is currently COMEWELL HOUSE, NORTH STREET, HORSHAM, WEST SUSSEX RH12 1RD. Oh look! As well as OMC Investments Limited, Spofforths Private Client Services LLP is at that address - Spofforths are the accountants who signed off on the Marcela Trust accounts for 2010, so seem to be favoured by Ms. Rose/Lawson for her business arrangements. Presumably they are holding the company details and managing correspondence until an actual office is opened.

I wonder whether QHH Limited are is going to start engaging with OMC Investments Ltd, Camelia Botnar Ltd, the Marcela Trust or the Camelia Botnar foundation? If so, how and why?

Summary

The Marcela Trust is populated with people who have been and are involved with a variety of Botnar family enterprises. CASH is kept afloat by OMC money, but now that's gone to the Marcela Trust they have to live off their reserves. There's no indication where this £70 million in the Marcela Trust is going to go, but it seems that being a trustee can be a very lucrative quarter-of-a-million-quid-a-year gig, as Dawn Pamela Rose/Lawson could tell you.

The Marcela Trust donated virtually nothing to anyone in FYE July 2011. I am going to be watching with interest to see what the accounts for FYE July 2012 reveal, when they finally get published. What are they planning to do with the £69 million-odd of investments they are holding? If CASH isn't expecting anything, who is? To which charities are they going to be donating - and whom will they be paying fat salaries? What's going on at 14 Buckingham Street, Westminster - is anyone around to ask questions of Mr. Brian Arthur Groves or his representative there?

The Marcela Trust won't bring home the bacon

[Author's note: this started as a rant about bacon, but the more I dug up, the smellier this seemed. Anyone wanting to chase down the threads here and ask some pointed questions, do feel free.]

According to Consensus Action on Salt and Health we should be eschewing bacon as two rashers of bacon contains over half one's daily salt allowance.

They say that like it's a bad thing:

"For every one gramme reduction in salt intake we can prevent 12,000 heart attacks, strokes and heart failure," said Cash chairman Graham MacGregor.

The RDA of salt (an amount no doubt pulled out from between Mr. MacGregor's tofu-fed gluteus maximus) is 6g. We eat an average of 9g. So if no-one ate more salt than recommended, we'd save 36,000 heart attacks, strokes and heart failures. In a pig's eye.

So who are these Concerned Upstanding National Treasures at CASH?

CASH was set up in 1996 as a response to the refusal of the Chief Medical Officer to endorse the COMA recommendations to reduce salt intake, following the threat of withdrawal of funds by the food industry to the Conservative Party.

"Was set up". I note the use of the passive tense there. "Was set up" by whom, exactly? And who is funding them?

CASH is reliant on voluntary contributions in order to fulfil its expanding role such as running National Salt Awareness Week, producing and distributing resources etc. CASH is unique in its work. The role it performs is not undertaken by any other organisation, so your support is vital.
...
We are very grateful to The Marcella[sic] Trust and the British Heart Foundation for their continuing support of CASH.

Who are the The Marcela Trust and what do they want?

THE CHARITY PROVIDES SUPPORT TO SELECTED CAUSES IN LINE WITH THE CHARITY'S OBJECTS.

Could they be any more vague? And, oh look! Income for 2009 was £730K, most of it was spent. Income for 2011 was £0 and £14K was spent. Income for 2010 was £70MM and £800K was spent. WTF? The 2010 accounts confirm that these clowns have a £69MM balance.

It's quite hard to find out any information about what The Marcela Trust does; Google doesn't reveal much, and their entry on the Charities Commission site is rather unhelpful. Interestingly, The Marcela Trust contact address is 14 Buckingham Street, London - the same address as Guardian favourite the Institute for Public Policy Research. Perhaps they are next door neighbours? Or perhaps the IPPR knows more of what The Marcela Trust does than one might expect?

Taking trustee Dawn Pamela Rose as an example, a lady with a remarkably similar name is director of a number of "generic" names, including "OMC Investments Limited", "Camelia Botnar Limited" and (my personal favourite) "QHH Limited". Dawn is listed as living at Park Farm, Saham Hills, Norfolk. Oh look! OMC Investments Limited is also listing 14 Buckingham Street, Westminster as its contact address. What a coincidence. They seem to be into property investments in a big way. I wonder if any of that £70MM in the Marcela Trust accounts came from OMC's investments? Apparently so, according to the accounts:

During the year the Trust received a donation of 95.5% of the share capital of Omarca Investment Holdings Limited. Omarca Investment Holdings Limited is a dormant intermediary holding company which holds 100% of the shares of OMC Investments Limited. OMC Investments Limited's principal activities are property dealing, management, development and investment.

That seems very out of line with the Trust's previous fundraising and spending. I wonder what OMC intend it to be spent on? I note that staff costs (1 manager, 3 administrators) were £290K wages and salaries, plus about 10% of that as pension contributions. "D Lawson" (manager?) was paid over £240K and N Malby (administrator?) gets just over £40K. Nice work if you can get it.

Trustee Mark Robert Spragg from Teddington is a director of Zwischenzug Limited (apparently "Zwischenzug" is a chess tactic) based in Pinner. What do we know about Zwischenzug?

Their current status is 'Company not trading', and their founding director, Norman Mcmillan, has been the director of 2 other companies. Norman Hamilton Mcmillan is the only shareholder of Zwischenzug Limited [...] The company's current net worth is £20, and the value of their shareholders' interest is £20.

Wonder what he uses it for?

Trustee Brian Arthur Groves is a director of the Camilia Botnar Foundation which appears to be a legit and active charity - Dawn Rose's Camilia Botnar Limited company appears to be the same as Camelia Botnar Homes and Gardens which sells things made by the craftsmen and trainees employed by the Foundation. According to the Marcela Trust accounts he has a Guernsey-based company B G Consultants Limited, which is where The Marcela Trust paid him £85K in 2010, and presumably he doesn't have to worry about too much tax there. I'm surprised that the IPPR haven't let their neighbours know their feelings about tax avoidance.

I would be fascinated to learn what's going on with The Marcela Trust, these trustees, and their mesh of companies and charities. In my experience, the more an organisation tries to deflect interest about what it does, the more reason there is for people to ask pointed questions about it. Any journos out there up for a bit of digging around Companies House and doorstepping 14 Buckingham Street, Westminster?