Cyrenians Cymru, the Welsh homelessness charity, has gone into liquidation owing £915,000 following the arrest of its finance director for fraud.

The charity went into administration earlier this year and police were called in. Two people have been arrested on suspicion of fraud by South Wales Police, including former finance director Mark Davies.

Liquidation documents filed with Companies House reveal that the administrator for Cyrenians Cymru, Alun Evans of Bevan and Buckfield, intends to sell the charity’s property and equipment but anticipates there be a shortfall of £744,000 once that it done.

The administrator expects to realise £255,000 from the sale of the charity’s property and £5,845 from the sale of equipment. Once it has paid back a £90,000 loan secured against the property to the Cooperative Bank that leaves £170,845 available for creditors.

Employees are owed a total of £292,000, including of £29,000 as preferential creditors.

The next largest creditor is the Heritage Lottery Fund which is owed £290,000. Cyrenians Cymru also owes HMRC £128,000 and other creditors include Gwalia Housing, and its utilities companies.

Between 27 January, when it was formally placed in administration, and 20 March it received £71,000 from the City and Council of Swansea for its supporting people programme. It has spent £48,000 on paying employees.

Cyrenians Cymru specialised in tackling homelessness and poverty in Swansea and the surrounding area. It was registered with the Commission in 1974 and employed 75 staff. It had ten active projects with an estimated 2,500 service users in Wales.

Fraud was suspected after the senior management team called in auditors when they were concerned about high spending levels in one project, Family Housing. Auditors said they were unable to finalise the accounts and concerns were reported to police at the end of 2014.

An extract from a board meeting dated 18 December 2014, which is included with the liquidation documents, reveals that the charity’s leadership attempted to broker a merger with Caer Las, another housing charity in South Wales.

Most of the charity’s projects have since been transferred; six to Caer Las and one to Gwalia Housing. The other three projects ended on 10 February 2015.