The Charity Commission is examining a complaint about financial controls at the south London Hindu charity Sivayogam.
The commission removed the charity’s founder as a trustee in 2008 only for the charity tribunal to overturn the decision the following year.
In what was the first appeal lodged with the tribunal, the judge ruled that the commission was wrong to remove Nagendram Seevaratnam as a trustee on the grounds of protecting the charity’s assets.
The tribunal said it was "most concerned" to hear that evidence submitted to the commission by Seevaratnam detailing relationships with funding recipients in Sri Lanka had not been translated into English. He was reinstated, but resigned soon after because he had come to the end of his 15-year term of service.
In 2010, the commission said in a report based on a two-and-a-half year investigation of the charity that it lacked due-diligence and monitoring procedures to protect grants made overseas from abuse, but found no evidence to back up a complaint that money given by the charity to an organisation in Sri Lanka had reached the Tamil Tigers insurgency group.
A spokeswoman for the commission said today: "The commission has one live case that was opened on receipt of a complaint about financial controls within the charity. It is not a statutory inquiry case."
She said the commission had been in contact with the charity and its trustees, but would not comment on the nature of the allegations.
Seevaratnam, founder and spiritual leader of Sivayogam, said the allegations were "all rubbish" and were motivated by jealousy and politics.
"There is not a single instance where they can say we have done wrong," he said.
Seevaratnam said the charity had sent a reply to the commission on the matter in March 2013. "It’s almost a year since we replied, and nothing else has come so far," he said.