According to the Indian newspaper The Hindu, Believers’ Church Caarmel Engineering College is closing amid a financial crisis. The news provoked a demonstration at the college on Monday. According to video posted on YouTube earlier this week (and embedded below), the college maintains the school is halting new admissions due to a financial crisis but that current students will be able to finish their programs. There were no promises made going forward. Thus, the future of the school is uncertain.
The Hindu report said students and parents were in a panic because the “college management said that they were unable to run the institution further due to financial crisis.”
Although I am not sure of the significance of this, the protest was triggered by the institution being excluded from the yearly allotment list published earlier this week.
Foreign Donations Helped Fund the Engineering School
Caarmel has been the recipient of Gospel for Asia -U.S. donations in the past. According to a filing in an Indian tax court, Gospel for Asia – India and Believers’ Church acknowledged that they used foreign donations for expenses at Believers’ Church Medical Center and Carmel Educational Trust (the trust which manages the engineering school). The quote below comes that court filing. Shri Venkitachalam represented GFA/BC:
On the contrary, Shri Venkitachalam, the ld.representative for the assessee submitted that both the assessees advanced funds to other registered trusts which have similar objects. According to the ld.representative, the assessee advanced funds to BCMET for construction of hospital building. BCMET is also a registered trust u/s 12AA of the Act. The ld.representative further submitted that Carmel Education Trust also a registered charitable trust u/s 12A of the Act was given funds by the assessee to carry out their charitable activities.
GFA/BC hoped to avoid paying taxes on the deflected income. The tax court had this to say about the income redirected to Caarmel and the medical college:
We have considered the rival submissions on either side and also perused the material available on record.It is not in dispute that substantial income of the assessee trust was not used by both the assessees for the purposes for which they were formed. (emphasis added)
This case in itself should help address issues in Murphy v. GFA. In that case, the Murphys assert that GFA didn’t use donations as donors intended. GFA acknowledged as much in their defense against the tax assessor. However, in all of the literature I have read about GFA, I have never read an appeal for donations to the Believers’ Church Medical College or the Caarmel Engineering College. These facilities charge medical fees and tuition. I suspect most GFA donors would be surprised to learn they exist.
In any case, it appears that Caarmel Engineering College is in some jeopardy. This video shows a vigorous protest and upset crowd over the situation.
UPDATE: If I am understanding the English of the speakers in this video, the closure may only be for one class year. The financial crisis may cause the school to fail to begin a class while they may be able to complete the work of classes underway. The situation does seem to be uncertain which has triggered a lack of trust in management.
At one point near the end of the video, a student asks why a financial crisis in Believers’ Church should effect the school since the school generates revenue through tuition.
With a little more digging, I found this video. At 53:53, a man who appears to represent Believers’ Church stands to read a statement which says essentially that Caarmel will not take new students during the 2018-2019 school year due to a “financial crisis” but the current students will be able to continue their studies.
Like this article and want to see more like it? Support this blog at Patreon.com.
As a University accountant, I don’t see how suspending admissions for a year would help with a “financial crisis”.
The costs are overwhelmingly fixed (staff and infrastructure), so not taking on a cohort simply means less income to defray them.
Negative coverage and legal expenses are affecting KP’s pocketbook.
With the ongoing lawsuit, he might also be being more careful about diverting funds.
I’m confused. Didn’t Believers Church have about $150 million in excess funds sitting around in banks not too long ago? Where did all that money go? Are they UNABLE or are they UNWILLING to fund the Engineering College? How much would the savings be by skipping a single cohort? Couldn’t be that much? Are they laying off instructors? Telling the entire world that Believers Church is having a financial crisis? What a terrible PR move.
Interesting that when KP was spending most of his time in the USA, the Engineering College was apparently doing fine. Now that he’s back in India most of the time, it suddenly flounders. Are parents and students in India wising up to his deceptive ways? Are they reading this blog? Are they seeing how the RICO suit is going badly for Yohannan & GFA?
These are all good questions. Money has never been a problem for KP. He has always had more than enough. It is where he spends it that is now at issue. He may still have millions sitting around but it is designated and not for Caarmel since they have never raised any money for the school. They have spent donor money for educational institutions in the past but that was then.
So while KP Yohannan was improperly diverting donor funds to the Engineering College for many years, Caarmel had enough funds. Is Believers Church obeying the Foreign Contribution laws for once? Is that why Caarmel is out of cash and blaming Believers Church’s financial crisis? Did KP Yohannan’s deciptions and mismanagement put the engineerings students in the position now of cheering FOR more cheating the FCRA laws just like the good ole’ days?
If you recall, GFA’s “original” four Indian FCRA entities (Gospel For Asia-renamed Ayana Charitable Trust, Believers Church-India, Last Hour, and Love India, all recently lost their authorization to receive foreign funds. The most recent FC filings GFA indicated the use of a different set of Indian shell NGO’s to receive funds in from the West (Shekina, Rehaboth, New Life, Fraternity Trust, etc). Has anybody checked their status? Have any of these entities filed an FC-4 or FC-6 lately? Are donations from the west declining? If so, how much? I seem to remember a -40% decline in GFA-Canada’s donation income per their T-3010 filings 2017 vs 2016. It wouldn’t be surprising if there has been a similar decline in USA, Australia, UK, New Zealand, etc.
I think you may have discovered a crack in the dam. The Indian govt starts cracking down on use of donations & a BC school is in trouble. What about the medical school & hospital and the private schools for children?
And so it begins. There is a judgment coming from God directed at the people in this organization. I will keep warning those who are still inside to get out now, before things become much worse. Gal. 6:7, “Do not be deceived: God cannot be mocked. Whatever a man sows, he will reap in return. The one who sows to please his flesh, from the flesh will reap destruction…”
Apparently India is also having a student loan crisis. A few days ago the Times of India reported that this school along with others were closing because there are too many schools and not enough students who can afford to attend: https://timesofindia.indiatimes.com/city/nagpur/deshpande-plays-raagas-hindi-songs-on-unique-sitar/articleshow/64812634.cms It looks like the poorly managed schools are being forced out of business by their competition. At this point I do not think anyone would accuse KP of doing a good job managing anything he has acquired. Conmen like him tend to make foolish business decisions because they think they can lie their way out of any kind of trouble.
https://www.youtube.com/watch?v=CVXaA_VNA9U
This is making me think of ITT Technical Institute and similar schools going under a few yrs ago because the Feds cut them off from student loans. I read a bit on Indian colleges from Mr J’s links. There are “self financed” colleges (private) like the BC engineering school and “private” (actually government funded) colleges. It seems there like here, some self financed institutions are suspect in terms of academic rigor & quality.
I wonder if the BC colleges/universities have standard accreditations and their degrees recognized by other institutions or are they like some Bible “colleges” here.
I believe their graduates are recognized for their degrees. The issue is that the school didn’t have the money to commit to another class and withdrew from competition for seats allotted to students based on entrance exams.
ITT Technical was a for profit school and so aimed to get a lot of students signed up and paying even if they weren’t capable of the schoolwork (and quite frequently the instruction wasn’t very good). At least the BC school doesn’t seem to be ‘for profit’ though how good it is is another matter. I note a large number of the assistant professors do not have PhDs. For those not in the know the top technical institutions in India are the 23 Indian Institutes of Technology (IITs); those graduating from them with good grades are in high demand for engineering graduate programs around the world.
“a student asks why a financial crisis in Believers’ Church should effect the school since the school generates revenue through tuition.”
Also, how does turning away new customers solve a financial crisis?
That might depend on whether the tuition fully covered the cost of instruction. Non-profit schools sometimes subsidize instruction costs by donations or interest from the endowment. I speculate that new schools might run at a loss for a while because of heavy startup costs and the need to establish a reputation.
As the case I referenced in the post suggests, Believers Church has subsidized the school in the past with foreign donations from the U.S. and around the world. These donations are under tremendous scrutiny right now and Yohannan may have told the church not to use those funds. If they can’t be used, the tuition might not cover the costs.
Bet David Barton caused all of this, right Throck?
You were on a roll until this comment. v