Assets of South Auckland’s Samoan Seventh Day Adventist Church are under control of BDO’s Andrew McKay after a High Court ruling there is a real risk of ongoing financial mismanagement with Pastor Willie Papu still in effective control of trust assets despite a Charities Board ruling disqualifying him from acting in any management role.
Pastor Papu’s daughter Elizabeth Papu was convicted in 2017 following theft of $1.6 million from Church funds; sentenced to two years nine months’ imprisonment.
The High Court was told a Charities Services investigation found Pastor Papu’s son wrongfully received over $316,000 for his personal benefit. Both father and son dispute this finding.
Charities Services also named other Church officials allegedly receiving amounts without proper authority, including Church treasurer Joseph Stowers named as taking nearly $499,000 of Church funds as undeclared income.
In 2020, the Charities Registration Board de-registered the Samoan Independent Seventh Day Adventist Church Trust, on grounds of Ms Papu’s and Mr Stowers’ ‘unlawful or corrupt’ use of Church funds.
Meanwhile, the Church transferred its substantial property holdings to a separate property trust, avoiding the tax consequences of de-registration. Church assets are estimated to total forty million dollars.
It is alleged Pastor Papu controls operation of this Property Trust, despite his current disqualification order.
Justice Wilkinson-Smith said email evidence indicates Pastor Papu is in de facto control of Trust assets with his approval needed for all financial decisions. Tithes and donations paid to the Church are being paid into bank accounts controlled by Pastor Papu’s supporters, she said.
There have been complaints about lack of accountability: decisions made without proper meetings; poor record keeping; and no financial statements.
The High Court was told the Church auditor resigned in frustration, lacking proper information to complete his audit of the 2019 accounts. No financial statements for Trust assets have been completed since that date.
Mr McKay was appointed under the Charitable Trusts Act to take control of Church assets, to identify the extent of its assets and liabilities, and to report back to the High Court every three months.
No time limit was imposed on his appointment. A time limit creates potential for obstruction with a view to simply waiting out the management period, Justice Wilkinson-Smith said.
Toailoa v. Eliu – High Court (10.06.24)
24.147
Post judgment Note: Pastor Papu and interests associated with him are appealing the High Court’s appointment of a temporary manager. Mr McKay’s appointment is stayed, pending this appeal.