Potanin v Charity Commission: when a founder's inaction becomes misconduct
Tribunal upholds removal of sanctioned Russian billionaire as charity founder for failing to resign.
Vladimir Potanin v The Charity Commission for England and Wales [2026] UKFTT 271 (GRC) is a significant First-tier Tribunal decision on the scope of the Charity Commission's removal powers under section 79(4) of the Charities Act 2011, delivered on 25 February 2026.
Mr Potanin, a Russian billionaire and former Deputy Prime Minister, established the Potanin Foundation as an English charitable company in 2005, endowing it with approximately US $100 million. As Founder and sole member, he held 100% of the voting rights and the power to appoint, remove and set the terms of office of the trustees. Following the Russian invasion of Ukraine in February 2022, professional advisers began withdrawing from the Charity. On 29 June 2022, the UK designated Mr Potanin under the Russia (Sanctions) (EU Exit) Regulations 2019, triggering an asset freeze that extended to the Charity — since it was "owned or controlled" by him within the meaning of regulation 7 — rendering any dealings with its funds a criminal offence without an OFSI licence. The Commission opened a statutory inquiry on the same day and appointed an Interim Manager. On 16 June 2023, it removed Mr Potanin as Founder and terminated his membership. He appealed.
The Tribunal addressed six issues. On the threshold question of whether Mr Potanin was an "officer" for the purposes of section 79(4), it rejected a restrictive reading tethered to company law definitions or day-to-day management responsibility. Given the infinite variety of charities subject to regulation, "officer" bears its wide, ordinary English meaning: the Commission need only identify the specific office, formal or functional, from which removal is sought. Mr Potanin's suite of constitutional powers as Founder satisfied that test without difficulty.
On misconduct or mismanagement, the Tribunal found that Mr Potanin's failure to resign — both before UK designation, when the risk was obvious and the mechanism to resign was entirely within his unilateral control, and after designation, when consent to resign could have been sought — constituted a breach of his fiduciary duty of single-minded loyalty to the Charity's objects, as codified in its amended Articles by reference to Children's Investment Fund Foundation (UK) v Attorney General [2020] UKSC 33. The duty was proactive and non-delegable; passive reliance on advisers or the regulator to prompt action was insufficient. The Tribunal was careful to note that no suggestion of financial impropriety arose: the misconduct lay solely in Mr Potanin's continued presence in the governance structure.
The Tribunal further held that removal was necessary or desirable to protect the Charity's property under section 76(1)(b). Indefinite reliance on interim management was neither practicable nor an appropriate use of charitable funds. The appellant's argument that resignation would leave the Charity "tainted" by association went to reputational perception, not the legal impediment arising directly from office-holding by a designated person.
On proportionality, the Tribunal acknowledged Mr Potanin's substantial philanthropic contribution but found that his continued involvement had a severe and detrimental effect on the Charity's ability to pursue its objects. The consequences of designation, precipitated ultimately by Russia's invasion of Ukraine, rendered his position untenable. Removal was proportionate.
The appeal was dismissed.
The decision repays careful reading on two points in particular. First, the broad construction of "officer" confirms that constitutional authority over a charity — including powers exercisable only periodically — is sufficient to engage the removal jurisdiction, regardless of day-to-day involvement. Second, the analysis of fiduciary duty in a sanctions context is instructive: where designation of an office-holder foreseeably threatens a charity's ability to deal with its assets, the duty of loyalty requires proactive resignation, not passive forbearance pending regulatory instruction.
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