Malek Fahd to stay open after $19 million government funding restored
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Malek Fahd to stay open after $19 million government funding restored

Malek Fahd Islamic School in western Sydney has had its federal funding restored after a series of drawn-out legal battles with federal and NSW governments and its founding organisation nearly led to the school closing its doors on two occasions.

Federal funding totalling nearly $19 million per year will be restored to the private school after it replaced its entire board and negotiated a new rent arrangement with its founder, the Australian Federation of Islamic Councils, after allegations that AFIC was charging the school inflated rent.

Malek Fahd's chairman John Bennett says the federal government decision to restore funding gives the school and its 2500 pupils 'certainty about its future'.

Malek Fahd's chairman John Bennett says the federal government decision to restore funding gives the school and its 2500 pupils 'certainty about its future'.Credit:Nic Walker

"The Department has advised that [Malek Fahd] has rectified all issues relating to the management of the school," Federal Education Minister Dan Tehan said in a statement.

It is understood that the school is still working to resolve similar issues with the NSW government, which contributes state funding of about $5.7 million, around whether it is operating for-profit.

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Chairman of the school's board John Bennett said the federal government decision to restore funding gives the school and its 2500 pupils "certainty about its future".

"We've worked flat out, we've worked very hard to make sure the school is compliant if we're taking public money," Dr Bennett said.

Mr Tehan said the school will also need to have a separate bank account for recurrent funding from the federal government and demonstrate that "sale or lease arrangements for school land are commercially sound" to maintain its approval.

Malek Fahd's lawyer told the NSW Supreme Court last year that the school's board made an unprompted decision to double the rent it paid AFIC in 1995 and raised the annual rent to $900,000 in 2000, far more than the $400,000 at which a commercial valuation had placed market rent.

It is understood that the new rent amount was nominated by a judge on the basis of a commercial valuation.

Additionally, ownership of one of Malek Fahd's three Sydney campuses was transferred from AFIC to the school last year, meaning the school will only pay its founder rent for two campuses going forward.

Dr Bennett said the school's new board, appointed in 2016, had also amended the constitution so that anyone associated with AFIC cannot be appointed to the board.

Dr Bennett said the school nearly went into voluntary administration twice in the past two years.

"Had we not taken the legal action against the Commonwealth and state governments to get the time to resolve the matter with AFIC, we would have closed in 2016," Dr Bennett said.

Malek Fahd has three campuses in Greenacre, Hoxton Park and Beaumont Hills and takes students from early childhood to year 12.

It has performed strongly in the HSC in recent years, and was ranked 69th in the state last year, up from 76th in 2016.

The school has also consistently performed well above the average for comparable schools in nearly all NAPLAN fields across all years.