The Charities Regulator has told troubled Dublin charity Inner City Helping Homeless that it will ask the High Court to wind up the company because its reputation has been "irreparably and irretrievably damaged".
In a letter dated 4 October, the regulator said that it will seek the immediate appointment of a provisional liquidator "to take possession and control of the assets and affairs of the Company".
The charity has been in turmoil since its founder and CEO, Anthony Flynn, died in August after it emerged he had been accused by several men of sexual abuse.
In the letter, obtained by Prime Time, the regulator said that it was motivated to resolve the issues faced by the charity on an urgent basis and will therefore "place executive control of the company into independent hands as the current trustees are in an impossible position".
Prior to the liquidation of the charity, the regulator said it intends to "secure the cash resources of the company and transfer them to the greatest extent possible to another organisation with similar charitable purposes".
The proposal by the Charities Regulator follows an application by Inner City Helping Homeless to the High Court seeking the appointment of an inspector to investigate the charity.
But the regulator said that it was "simply not possible" for a court-appointed inspector to produce recommendations that would "repair the reputation of the Company sufficiently to allow it to return to providing services as normal".
"Regrettably, and having considered the matter fully, the Regulator considers that the reputation of the Company has been irreparably and irretrievably damaged," it said.
It noted that the crisis concerned allegations that were "criminal in nature" and thus within the remit of the Gardaí, and not a court-appointed inspector.
It said that any governance concerns could more appropriately be investigated by the Charities Regulator directly, given its statutory mandate, and said that, given there is currently no functioning executive of the charity, it was "not tenable even on a short term basis".
The regulator also notes that, should it decide that it is appropriate to do so, it will appoint an inspector – under Section 64 of the Charities Act – to conduct its own investigation of the charity.
Solicitors McCann Fitzgerald, writing on behalf of the Charities Regulator, said that it is proposing the winding up of the company given the "significant issues affecting the company" highlighted at a meeting it had with representatives of Inner City Helping Homeless last week.
The regulator said it has concerns that the resources of the charity would be depleted if its own court-appointed inspector sought to carry out an investigation.
The regulator said its decision to act was based on information given to it by the sole remaining trustee and managing director of the charity, Ms Ann Birney.
"It is difficult to escape the conclusion that charitable donations will cease entirely," it said.
The regulator said that Ms Birney described the charity's reputation as being "in tatters" and the position of the charity as "perilous" and "untenable".
It also notes that former chairman David Hall, at the time of his resignation, "had formed the view that the charity could no longer continue".
The regulator has concluded that, in the interests of safeguarding the assets of charity, it will seek the immediate appointment of Mr Kieran Wallace of KPMG as a provisional liquidator to "take possession and control of the assets and affairs of the Company pending the making of a winding-up order".
In a letter responding to the proposal, Inner City Helping Homeless said that it welcomed the intervention of the regulator.
But it noted that the Charities Regulator’s proposed intervention occurred "only after the Charity itself had first written to the Regulator as far back as 9 August" and said it was concerned that an investigation into what occurred at the charity could be delayed, constrained, or not take place at all.
Barrister Remy Farrell SC has been appointed by the charity to carry out an independent review into the controversy surrounding the allegations, and the charity asked that this review be "permitted to continue".