The Charity Commission has opened a statutory inquiry into the governance and financial management of a Wolverhampton-based Sikh education charity.
The commission said in a statement today that it began investigating Nanaksar Thath Isher Darbar after the charity failed to submit annual reports for 2013/14 and 2014/15, and auditors discovered weak financial controls and poor record-keeping in the charity’s report for 2012/13, submitted in December.
The charity, which has objects including education, the advancement of the Sikh religion and providing facilities for worship, runs three Sikh temples and owns the land used by the Guru Nanak Multi Academy Trust in Hayes, west London.
Its accounts for the year to March 31 show the charity, which was registered in 1993, had an income of £2.1m and spent £656,000.
In a statement, the commission said it had "serious concerns regarding the financial management of the charity, its administration and the conduct of the trustees".
It said many of the commission’s concerns related to land owned by the charity, including a football ground in Hayes purchased in July 2010, on which the charity wanted to build a school but was denied planning permission.
Instead, it turned the site into a temporary school car park but failed to get planning permission in advance – resulting in enforcement action from the London Borough of Hillingdon.
The charity is appealing against the enforcement action, but the commission said it "nevertheless has serious concerns regarding the purchase and subsequent use of the site and how trustees are discharging their duties to protect the charity’s asset".
The commission also has concerns about two nearby sites that are used by the academy trust, but which were previously used as securities against loans to the charity, which the trustees have defaulted on, placing the charity’s assets at "significant risk", the commission statement said.
The inquiry will investigate the charity’s financial controls and the administration, governance and management of the charity, as well as whether the trustees had complied with their legal duties, the statement said.
No one from Nanaksar Thath Isher Darbar was available for comment.