The Charity Commission is investigating two connected charities over “financial irregularities” and concerns about Gift Aid claims.
The regulator announced today that it opened a class statutory inquiry into Islamic charities Idaara Maarif-E-Islam and The Voice of Truth in October last year.
The Voice of Truth has since been removed from the register because it has ceased to operate.
Idaara Maarif-E-Islam's latest accounts show it had an income of around £225,000. Around half its income was from donations.
The Commission said had been unable to announce the inquiry before this point so as to avoid harming any investigative work.
The regulator found financial irregularities linked to Gift Aid claims involving both Birmingham-based charities.
It also found inconsistencies between the income and expenditure reported in The Voice of Truth's accounts for the year to March 2016, and the charity’s bank records for the same time period.
It said substantial payments have been transferred between the charities and that at least one trustee of Idaara Maarif-E-Islam has also served as a trustee of The Voice of Truth.
The inquiry is seeking to establish whether the close relationship has been in the best interest of the charities and if any resulting conflicts of interest have been adequately managed by the trustees.
The Commission is also concerned about payments made by The Voice of Truth to individuals and a company that may be connected to the charity.
The regulator will seek to establish if these payments have been made in the best interests of the charity and if any conflicts of interests have been adequately managed by the trustees.
In January, The Voice of Truth was removed from the register of charities after the inquiry found that it had ceased to operate.
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