Memorandum

To

18 March 2011 Open letter to Africa Centre stakeholders:

From Mobile Email

Boko Inyundo, Trustee, Africa Centre 0044 7779 299 105 bokoinyundo@yahoo.co.uk

To whom it may concern, Re: Plans confirmed by the Africa Centres Board to sell this charitable trusts 38 King Street, Covent Garden (London), building

This memorandum is written for the attention of any party with an interest in ensuring that the current Board of the Africa Centre (London) executes its duties in the right and proper manner as it now formally and actively seeks to sell the leasehold to the much loved and only physical asset of this charitable trust, its 38 King Street headquarters in Covent Garden, London. For context I am a Trustee of this charity and am deeply concerned with the manner in which this decision has been / is being taken, rather than the decision to sell per se. This concern became concrete during a Council of Management meeting that I attended on 16 March 2011 when Oliver Tunde Andrews, in his capacity as chairman of the Africa Centre, explicitly confirmed that the current Board had now decided to sell the leasehold. This confirmation was passionately supported by the new deputy chairperson, Bimpe Nkontchou, a lawyer who has committed much time to providing the legal framework to enable the proposed sale to happen, though her and the collective core team actively driving the sale has seemingly spent a lot less time articulating whether any alternative path offers a self-sustainable future for the trust. Since I became a Board member over three years ago I have always been an advocate of ensuring that the future of this charity is truly sustainable. I take this step of writing this open letter as I do not believe that the current Board has adequately explored the sustainability of any scenario in which this charitable trust does not wholly own its 38 King Street property. A core group of Trustees have devoted much time to discussions with a single property developer, Capital and Counties (CapCo), about the fair value of the property, however, that group have not, as yet, articulated what it may do with the largesse the trust receives from this sale and there has been no rigorous exploration of whether any such route offers a truly sustainable path and the optimal likelihood of this cherished, over 40 year old, institution prospering for many decades to come. This memorandum follows a formal, written, enquiry that I sent Oliver Tunde Andrews, chairman of the Africa Centre, on 20 February 2011 in which I expressed my heightened concerns with the process gearing the trusteeship towards agreeing the sale. This process has appeared to me to be an effort by a core group of Trustees to rail-road the option of sale through the current Board without the

necessary rigour required to investigate whatever plan B offered in terms of sustainability and whether any such plan met the purpose of the trust as enshrined in its constitution. It is perhaps notable that, when I probed the trustees that attended the 16 March 2011 Council meeting on whether they had sufficient information to convince them that the sale was the most appropriate option to take forward, one trustee, Wayne Callender, confessed that he simply wants to execute the sale so he could spend the time, that he otherwise commits to Africa Centre matters, towards perfecting his golf game! Bimpe Nkontchou also admitted, without my soliciting this information, that she had had to perform the due diligence on CapCos offer more or less all by herself as Oliver Tunde Andrews and the other proponents of sale on the Board were out of the country or busy. Note that Oliver Tunde Andrews is now permanently based in Nigeria and has called only circa 3 or 4 Board meetings in the past 2 years in London as his own logistics and professional commitments have served to compromise his ability to execute his duties as chairman, duties that would undoubtedly be more effectively performed in situ in the UK. Furthermore, as one trustee, Godson Egbo, observed during the 16 March 2011 meeting, he has not met, or even heard from, many of the circa 20 trustees since he joined the Board some 2 years ago. This comment regarding absenteeism of Board members was made when agreeing with issues that I raised regarding governance at the Africa Centre to date and whether the highly questionable structure and governance of the charity adequately lent itself to any consensual and proper decision making, especially in a circumstance such as this where such a significant resolution is being sought. I mention these three anecdotes to highlight how I believe this most momentous decision in the lifecycle of the Africa Centre is being made in entirely the wrong governance context. It is my belief that several of the current trustees have experienced mission drift in relation to the purpose of this charitable trust and are simply rubber-stamping the option to sell as they believe, once enacted, this will give them a window of opportunity to walk away from their longer term responsibilities as trustees. This deepens my concern as there is the serious likelihood that, post any contractual agreement with a property developer to sell, this current Board may well absolve themselves of the responsibility to then wisely use the financial capital gained in order to meet the trusts constitutional purpose. Whoever would then take on this responsibility would almost certainly be left in a thoroughly exposed situation without any legal recourse to reviewing the terms of sale agreed prior to that point in time. I hereby summarise discussions at the Council of Management meeting on 16 March 2011 so as to set out where the Africa Centre is currently at with regards to key aspects for consideration in engaging with the sale of the property.

1
1.1 1.2 1.3

Where are we now?

Bimpe Nkontchou believes that, in her capacity as a solicitor, she has performed adequate due diligence on the terms of sale Legal advisory support has been provided by the Africa Centres existing legal counsel at Bates Wells & Braithwaite solicitors, a Nick Ivey, Partner and Head of Property Draft head of terms for the sale of 38 King Street include:
1.3.1

The Africa Centre is to enter into a transaction with Capital and Counties (CapCo) that is to enable them to pursue planning consent for the property at their own cost and risk, subject to the grant and exercise of an option for a 125 year lease and a short term lease back to the charity to allow for its relocation. On the grant of the Option, the parties shall enter into and Agreement for the Head Lease and a Leaseback conditional upon exercise of the Option.

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1.3.2

Option period up to an including 31 December 2011 subject to the right by the Tenant (CapCo) to determine prior to end Option price - 200,000 (plus VAT if applicable) Option notice written notice exercising the Option in accordance with the terms of the Agreement and being not less than 21 days, such notice to be served at any time during the Option Period Option terms (i) on expiry of the Option Notice period the following will take place: Exchange of the Sale & Purchase Contract and payment of 10% of the premium of 10.5 million (less the Option Price) (plus VAT if applicable) Existing tenants of 38 King Street to be served with notice to quit (if not already done so) and CapCo to pay a further 40% of the premium of 10.5 million upon receipt of written confirmation that said tenancies have been terminated and said tenants have given up possession On completion and upon giving vacant possession to CapCo, a lease for a term of 125 years shall be granted to the CapCo on the terms and conditions as set out in Schedule 1 and the balance of 50% of the premium of 10.5 million to be paid; and A leaseback of nine months from the date of completion shall be granted to the Landlord on the terms and conditions set out in Schedule 2

1.3.3 1.3.4

1.3.5

(ii)

(iii)

(iv)

1.4

Michael Greensmith of Stanley Hicks Chartered Surveyors appeared to have been invited by Oliver Tunde Andrews and Bimpe Nkotchou to attend the Council of Management meeting on 16 March 2011. His attendance was appreciated and, although it transpired that he is yet to complete a survey of 38 King Street (this is expected later in March 2011), he offered his initial opinions on the draft heads of terms and on the issue of disposing of land/assets by charitable trusts, with specific reference to the Charities Act 1993 and, in particular, key points in section 36 of this Act. Michael Greensmith spoke generally and with reference to legal advice provided in writing by Bates Wells & Braithwaite which included interpretation of section 36. This advice broadly stated that:
1.4.1

Technically, granting an option to buy the freehold or, as in this case, a lease is not in itself a disposal. However, granting such an option is a binding commitment to make a disposal if and when the buyer exercises the option, at which point it would be too late to meet the requirements of section 36. Therefore the requirements of section 36 must be met before the option is granted. Section 36 has two main purposes. The first purpose is to make sure that there are no circumstances that require the charity to get the consent of the Charity Commission to the disposal. The Commissions consent will be required if: (i) (ii) The disposal price is less than open market value; or The disposal is to a person or company that is connected to the charity

1.4.2

1.4.3

The second purpose of section 36 is to make sure that the charitys trustees have followed a proper process to ensure that the charity is getting the best price and terms it reasonably can for the disposal of its land. This involves the trustees obtaining and

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considering and appropriate surveyors report before entering into any commitment whether by way of a contract or an option to dispose, and publicly advertising the proposed disposal unless the surveyor advises not to do so

1.5

Current cash-flow status of the Africa Centre

1.5.1

Trustee, Mark Artivor, probed with Mark Thomas, the Africa Centres Treasurer, where the Africa Centre was in relation to cash-flow. Mark Artivor specifically asked what is the timeline when the Africa Centre is likely to run out of money under the circumstance of its current operation? In answer to this question Mark Thomas noted the following: (i) 500,000 of the funds secured via recent fundraising (primarily via Arts Council England) has been ring fenced and can only be touched by way of a resolution with the Council of Management and his own approval as Treasurer Not including the ring fenced 500,000 the trust has circa 80,000 available in its current account Monthly loss is now circa 750 per month (whereas this was 3,000 per month just a couple of months back, however, Business of Culture have secured full tenancy of the building which has helped balance the income and expenditure. Oliver Tunde Andrews himself noted that this was a vast improvement from a few years ago when he joined when the Africa Centre was losing some 70,000 per month) On the existing income / spend rate it would be anticipated that the Africa Centre would spend approximately 50,000 in the next financial year and it would therefore be circa 2 years before the trust ran out of money The grant of the Option to sell to CapCo would have an impact on these calculations as there would be some things the trust could not do if it decided to sell (e.g. tenancy agreements would be cut short impacting revenues, though, if the option was exercised this would release an initial non-refundable 200,000 from CapCo which could be put towards such things as recruiting a fundraising director or programming coordinator or other spend linked to the charitys constitutional mandate) According to Mark Thomas Arts Council Englands Jonathan Treadway (Director of Regular Funding at Arts Council England) has confirmed that Arts Council England would not ask for its money back and that the Africa Centre could spend it on any commitments linked to it meeting its constitutional objectives (e.g. the hiring of project directors)

1.5.2

(ii)

(iii)

(iv)

(v)

(vi)

1.5.3

Business of Culture contractual terms (i) The contractual arrangements with Business of Culture were discussed at the end of the 16 March 2011 meeting as the direction of travel dictated that this would require review It appears that, prior to the meeting, a core group of Trustees that included Oliver Tunde Andrews and Mark Thomas, had agreed with Graeme Jennings, Director at Business of Culture, that this consultancys s tandard monthly

(ii)

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retainer would increase by 10% from 5,000 per month to 5,500 per month. A discounted hourly rate would now come into effect at 110 per hour. The Africa Centre Board and Business of Culture agreed that the retainer would specifically cover 9 days work per month and if the Africa Centres demands exceeded this amount this had to be agreed in writing with the Treasurer who would seek sanction from the Board. Any discrete consultancy initiatives would require Mark Thomas and Oliver Tunde Andrews to agree these. Any third party costs such as those for Sheila Ruiz, Susan Odamtten (secretary at 38 King Street) and accountants fees would be covered

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2.1

Summary of my concerns
Process
2.1.1

There has been no formal articulation of what the alternative to 38 King Street is and whether it: a) is the most sustainable path to pursue and; b) enables the charity to meet its constitutional mandate Every time the Trustees gather there are always several possibilities mentioned varying from remaining in the existing building and executing some small-scale refurbishment (note we had commissioned this to start in December 2010 but Trustees called this off without any consensus or formal rationale) to disposing of the property and existing as a virtual institution perhaps modelling the charity as an educational trust offering bursaries to African children seeking to study in the UK However, at no point, has any Trustee or Business of Culture defined what exactly the consensus is with regards to the trusts future and where the evidence is to provide greater conviction that any alternative route presents a more plausible opportunity to sustain the trust The latest consideration first muted during the 16 March 2011 meeting was for the Africa Centre to co-habit with the Royal Commonwealth Society (RCS), another charitable trust focussed on Africa and situated in 18-25 Northumberland Avenue, London. It is understood that Bimpe Nkotchou (and other trustees) have had two initial meetings with this group to explore such a proposition and indications are that the RCS is interested as it could benefit from additional support for its programming and would be in a position to provide the Africa Centre with access to its facilities (e.g. catering, meeting rooms, website management, office management etc). The RCS is believed to be open to rebranding itself as the vestiges of colonialism that their brand has do not sit comfortably with the provenance of the more overtly African Africa Centre. Such a proposition has its pros and its cons and requires time for further investigation by both these institutions Boards. Once again, the fact that this option was only introduced in the 16 March 2011 Council of Management meeting which was, with hindsight, clearly set up to rubber-stamp the decision to sell, provides further evidence of the somewhat adhoc, on-the-hoof, nature with which the current Africa Centre Board is considering the most critical decision it has faced in its +40 year history and which determines the future sustainability of the Africa Centre

2.1.2

2.1.3

2.1.4

2.2

Best price
2.2.1

I personally have serious reservations about whether the Africa Centre has secured the best price and terms it reasonably can for the disposal of 38 King Street. Although this

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opinion is, to some degree, subject to the upcoming surveyors report and the currently volatile London property market, it is notable that the Africa Centre team leading discussions about sale have only talked to a single property developer, in this case CapCo, and none of their competitors in this area such as Derwent, to provide one example
2.2.2

The Africa Centre Board has not, and at the 16 March 2011 meeting affirmed that it does not intend to, publicly advertise the proposed disposal Furthermore, the Africa Centre team involved has not done any due diligence or market analysis on the prospect of more confidence returning to the London property market over the next 1-2 years (note that a property news article was recently circulated to Trustees by Business of Cultures William Tayleur which explicitly noted that property prices in the Covent Garden area were anticipated, by independent industry analysts, to experience an uptick over the next year or two)

2.2.3

2.3

Cash-flow the current state of the Africa Centres finances provides the Africa Centre with some breathing space as there are sufficient funds in the trusts current account which, if managed well, appear to grant the Board in the region of 1-2 years to either: a) outline a plan of action to save the existing property and protect the provenance and integrity of this much loved site; or b) secure the best price, rather than solely market value, for the building whilst also executing proper due diligence and consensual decision-making on any alternative scenarios for a future that do not involve outright ownership of 38 King Street Governance
2.4.1

2.4

Issues with absenteeism and, with regards to several Trustees zero input at all, represent a significant challenge to this charity operating effectively. The Africa Centres governing document (its memorandum and articles of association) makes provisions about the maximum length of term of office or removal of trustees if they do not attend more than a certain number of meetings without apologies. No such mechanism for monitoring individual effectiveness at Board level has been implemented. If input to date by a greater than average proportion of Trustees has been minimal to non-existent then, from a governance point of view, I strongly question whether enough has been done to explore the sustainability of the current premises or even whether a best price for the current property has been achieved. I also question whether the current system of governance offers the charity much chance of sustaining the charity and delivering its charitable objects irrespective of whichever future scenario plays out This, therefore, raises the fundamental question should a new Board be voted in prior to rubber stamping any decision to sell? The aim would be to give that new Board a defined period of time to save the Africa Centre within its current premises or chart an appropriately robust alternative. There are several young, fresh, enthusiastic, aspirational, intelligent and experienced members of the Diaspora who have the appropriate mix of contemporary skill-sets and networks to make this happen. They simply want to be given the chance without being encumbered by the existing mission drift effects on the current Board. These members of the Diaspora are most keen to get involved only if 38 King Street remains one of the several options on the table (signifying the strength of goodwill amongst the Africa Centres constituents for the attractive and historic provenance of this building after all members of this group

2.4.2

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have danced there as teenagers, eaten there as young adults and are now coming back to attend the recent series of panel discussions sessions that Sheila Ruiz and several volunteers have been driving). Several formal expressions of interest in getting actively involved have been received in writing in recent days ever since the proposal to sell has been confirmed and more widely communicated
2.4.3

According to the Charity Commission for England and Wales information the Africa Centre has 20 trustees. This is a huge number for a charity with no employees according to precedent it should be 4 or 5. None of the Africa Centres wider stakeholders or interested parties, beyond the current Board and Arts Council England, has been notified at all, let alone in good time, about the prospect of the sale of the freehold to 38 King Street. Note that there are more than 4,000 contacts on the Africa Centres current database. At the 16 March 2011 meeting when I raised with the Board the consideration to communicate the decision to sell with a wider audience, there was collective mirth at the idea. It beggars belief that the Board does not recognise how critical it is to ensure that its immediate constituents are informed about such a momentous decision. It is in the best interests of all involved to ensure total transparency in relation to this decision and to build a collective narrative around such a concept, if anything to mitigate against the likely repercussions down the line when the very people we exist to serve belatedly find out that their much loved 38 King Street building is officially sold / closed. The apparent level of secrecy and the siege mentality within the current Board suggests to me a worrying level of discomfort with either the option to sell or the process through which it has been agreed or both. This needs to be investigated by the appropriate authority, perhaps Arts Council England or the Charity Commission for England and Wales? Trustees have not actively sought sufficient information to allow them to make such a significant decision with strong personal conviction. Note that the Charity Commission for England and Wales has specific rules detailing Trustees' responsibilities in relation to significant decisions such as these. There are 120 pages on disposing of land by a charity on the Charity Commission for England and Wales website. Any disposal needs to be in the charity's best interests and there should be full stakeholder consultation and detailed plans for the use of the proceeds. Guidance states that "as Trustees it is part of your responsibility to think carefully before disposing of valuable assets of your charity which may be useful in the future. For example, you should consider whether it would be better to retain the land for longer and perhaps continue taking any income from it, so as to earn more from it later" Irrespective of whether 38 King Street is kept or sold there is both an interim and long term duty to deliver on the trusts objective to support arts and cultural expression from Africa and its Diaspora. I sincerely question whether the current Board has the appropriate mix of skill-sets to deliver on this specifically for the following two reasons: (i) One is that the collective experience of mission drift had left many, if not all, with a sense of organisational fatigue and it is very likely that whatever decision is made there will be little appetite amongst several Trustees to provide substantive input into the programming element The programming committee is dysfunctional and hardly ever meets. I understand that there is only one regular contributor amongst the Trustees and

2.4.4

2.4.5

2.4.6

(ii)

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that is Mark Artivor as co-head of this committee. The recent enriched programming has been almost entirely the work of a third party contractor employed by Business of Culture, Sheila Ruiz. She must be thanked enormously for the thankless task of maintaining the programming stream which has, since December 2010, been much improved. Sheila Ruiz has been supported on a pro-bono basis by volunteers whom she has personally sought out and secured services from, again with little to no input from Trustees. There is a very real and present proposition that suggests Sheila Ruiz and this group of volunteers could, and in fact already are, running the trusts entire programming output and could, at far less cost to the Africa Centre than Business of Culture, deliver expressly on the challenge of reinvigorating this charitys position in the minds of its key constituents, the African Diaspora and Africa-interested communities in the UK
2.4.7

The Africa Centres existing human resource is already stretched (whether that's Business of Culture managing existing tenants, the programming etc or Trustees themselves stretched on representing the Africa Centre whilst delivering on their own day-to-day professional commitments). Just considering the option of sale is distracting to the extreme as all the energies the current Board has ought to be devoted to making what little it has go further (e.g. commissioning building works on the ground floor and basement; ramping up the programming to assist with its fundraising efforts; developing its new website which is nearing the latter stages of design and should come on-stream in April 2011; securing other / new Africa-relevant tenants etc). With the 2012 London Olympics now upon us we, once again (post the South African World Cup which the Board did not exploit at all), face another fantastic opportunity to serve the local and international Diaspora with something, I believe, is unique in its relevance to the Diaspora and Britain's own links to Africa. The current Board cannot miss this, perhaps most golden, opportunity to showcase the creativity of the Diaspora at the same time Africa's sporting prowess is on display literally in London's very own streets. I would also highlight that Londons local authorities and Arts Council England ought not to miss this chance to actively encourage the Board to utilize the Africa Centres provenance for the aspirations the relevant UK authorities have for the Cultural Olympiad At this stage, I feel strongly that not enough due diligence has been done on what any alternatives to 38 King Street offer in terms of sustainability and, as such, believe the current Board is not in a position to pursue an outright sale of the building at the moment. The fundamental underlying reasons are that: (i) (ii) The building is the trusts main asset The provenance of the premises remains powerful within the minds of our constituents; Its central London location is clearly a massive attraction (evidenced in CapCos valuation) and enables us to continue to position the organization as one that serves a broad church of people both for a UK African Diaspora from all corners of Africa as well as for a wider Africa-interested local and international community

2.4.8

(iii)

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2.4.9

The current Board should be encouraged by its primary stakeholders, such as Arts Council England, to give substantive thought to whether now is the time to collaborate more closely (e.g. via revenue sharing agreements) with other Africa-focused groups based in London such as the Royal African Society and AFFORD. I have personally offered to approach such groups to explore whether their aspirations would be complemented by enhanced partnership with the Africa Centre, however, the Board has not engaged in this proposition, reflecting its almost overwhelming focus on the sale option. If this global economic downturn has taught those in commercial circles anything, it is that a future defined by weak demand is / will require greater willingness to pool resources to better serve customers (hence growing evidence in commerce of joint ventures and efforts to collaborate within / across value chains - this has even spawned the word "co-opetition", this is not a typo but a play on the words cooperation and competition). Any historical, or existing, sense of competition and/or animosity between such groups serving the wider Diaspora needs to be dispelled as it may simply serve to compromise the inspiring potential of all these institutions. Who has the authority to push the current Board to more actively pursue such partnerships? Through informal soundings I am aware that Executives at the Royal African Society, AFFORD, the British-Nigerian Educational Trust, Star-100 and many others are very keen to become more substantively involved with the Africa Centre whilst stipulating that the 38 King Street physical asset is a key attraction

I am keen to find stakeholders / external influencers with due authority that can help me in my, so far failed, efforts to actively encourage the current Board to recognise the full breadth of its duties before making such a major decision. Let me know if you can help. Regards,

Boko Inyundo Trustee, Africa Centre

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