A toxic legal stoush involving a warring charity has seen a trust tipped into receivership, nearly $2 million placed into administration and court orders issued over a Muslim school property in South Auckland.

The school, Zayed College for Girls, was forced into lockdown this week after threatening videos were emailed to a neighbouring Muslim school.

Police are still investigating the threats and the college is currently being run by a commissioner. There is no suggestion the threats are linked to the dispute.

The special character Islamic college is caught up in a complicated legal dispute involving the Aotearoa Charitable Foundation Trust (ACFT) - which aims to further Muslim religious education - and an associated company called IH Limited (IHL).

The two entities own nearly 4.5ha of land in Mangere’s Westney Road. They were placed in receivership in April by order of the High Court following an application from ACFT trustee Taoufik Elidrissi.

Nearly $2m in the trust’s accounts is now under control of the receivers, and there are claims by one party that the money is being used contrary to the purposes of the trust to pay receivership costs and legal bills associated with the standoff.

Ecovis KGA joint receiver Clive Bish told the Herald the receivership was not due to financial problems but reflected governance issues at the charitable trust, including an apparent breakdown in relations between Elidrissi and fellow ACFT trustee Dr Ibraheem Hasan Alzaabi.

“The trustees weren’t able to carry out their duties because of issues between them.”

Bish said there were sensitivities around the case and he was limited in what he could say.

“I do need to be quite cautious because we know in the last couple of days, with the Muslim community, there are challenges and we need to be respectful of their position.”

He said the school land and buildings were owned by ACFT but the college was run by a separate governance board, so it was not directly impacted by the receivership and the property would not have to be sold to repay creditors.

“It’s not a financial issue that would lead to any assets having to be disposed of.”

Ecovis KGA receiver Clive Bish is overseeing the administration of assets. Photo / Supplied

Justice Robinson appointed Ecovis KGA under the Receivership Act on April 10. The order restrains ACFT and IHL from disposing of the Westney Rd land. Caveats have now been lodged against the titles.

The receivers were authorised to take possession and control of the two entities’ assets and administer them pending the appointment of new trustees.

Financial documents seen by the Herald show $330,000 was moved from ACFT’s accounts to the receiver’s trust account in the two months to June 26 for “administrative and banking purposes”, including maintenance and capital expenditure at the school.

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Bish told the Herald the receivers had not taken any instructions from either trustee, who were effectively sidelined from decision-making by the court order.

Court documents viewed the Herald show Alzaabi filed an injunction application this month in a bid to prevent the receivers taking any further money from ACFT’s accounts and sought an order rescinding the receivers’ appointment.

It’s understood the application is yet to be determined.

In a statement, Elidrissi said he applied for independent receivers to be appointed, as well as new trustees, due to concerns about the administration of ACFT and the security of its assets.

“I concluded, after taking legal advice, that filing proceedings and bringing my concerns to the court, was a step I needed to take to protect the trust, the college, and its assets. I felt I had no other option.”

He said the receivers were acting with integrity and he believed ACFT was in good hands, but declined to comment further while the matter was considered by the court.

Alzaabi told the Herald the receivership was using trust funds on legal and administrative expenses rather than empowering the school and community, allegedly diverting funds from their intended charitable purpose.

He said he had not received satisfactory statements detailing where the money had gone or for what purposes, so had applied to the High Court to remove the receivers due to concerns about the management of trust assets. The application was currently under consideration, he said.

Alzaabi also said he was deeply concerned about the threats which forced the schools into lockdown. He feared collaboration between ACFT and school officials to ensure the welfare of students and school property “is not happening” due to the receivership process.

Zayed College for Girls is being run by Commissioner Linley Myers due to earlier management and governance issues.

The college, and neighbouring Al-Madinah School were forced into lockdown on Monday after videos of a man discharging firearms were sent to members of Al-Madinah School.

Following the threats, security was beefed up and police provided extra support. Police said inquiries into the threats were continuing.

Myers told the Herald the receivers had been supportive of the school. The receivership had no impact on the school’s operation.

She referred questions about the email threats to police.

A Ministry of Education spokeswoman said Myers was appointed last year and had all the responsibilities of the Zayed school board.

The ministry had no involvement in the High Court receivership process.

Lane Nichols is Deputy Head of News and a senior journalist for the New Zealand Herald with more than 20 years’ experience in the industry.