The Charity Commission is investigating the financial management of a grant-making charity in connection with apparent losses of about £1.7m through loans and property investments in the US.
The commission today announced that in January it opened a statutory inquiry into Friends of Biala, which has objects of poverty relief and providing Orthodox Jewish religious education. The delay in announcing the inquiry was to allow the commission to make further enquiries before informing the trustees that an inquiry had been opened, a statement from the commission said.
The statement said: "The regulator is investigating concerns about the charity’s financial management and governance in connection with loans and invested funds in properties in the US that appear to have resulted in losses to the charity of about £1.7m."
The regulator said its investigation would have a particular focus on the management of conflicts of interest and the trustees’ investment decisions.
The charity, which registered with the commission in 1976, has not filed its accounts for the year to 31 March 2014, which were due at the end of January.
Accounts for the year to 31 March 2013 show an income of £52,614 from property and donations totalling £602. It made total grants of £1,627 to Biala Institutions, which is not obviously identifiable as an England and Wales charity. The accounts also show that Friends of Biala had total funds at the end of the year of £2.3m, of which £1.4m were investments. The value of the charity’s investments had fallen by £38,000 since the previous year.
The charity had not been required by the commission to provide accounts in any of the three preceding years, although its annual returns for each of these years show incomes of more than the accounting threshold of £10,000.
The only contact detail for the charity listed on its entry on the commission’s register is for its accountant, who said he could not comment on his client’s affairs. He said it would not be possible to contact either of the charity’s two trustees, both of whom live abroad, for comment.