The Charity Commission has opened a statutory inquiry into a charity whose trustees did not act on previous concerns raised about its expenditure in high-risk areas of the world.
The Olive Grove Foundation’s aims include helping people affected by poverty, wars or natural disasters.
The regulator said it contacted the charity in October 2019 over concerns about its expenditure in high-risk areas of the world.
The commission provided formal regulatory advice at the time, including requiring that the charity introduce stronger financial audit systems to ensure trustees could better monitor how the charity’s funds were being spent.
But after conducting a follow up case to monitor compliance with these requirements, the commission said it was not satisfied that trustees had acted on previous advice and serious regulatory concerns remained.
They include poor governance, poor monitoring of charitable funds and the use of a personal bank account to transfer money overseas.
The commission’s inquiry will investigate a number of issues including the charity’s financial controls, including the transfer of charitable funds to personal bank accounts, and the charity’s activities and overseas partnerships.
It will also assess whether there has been misconduct and/or mismanagement in the administration of the charity.
In addition to opening the inquiry, the regulator said it had also exercised its legal powers to restrict the transactions the charity’s trustees can enter into without its prior written consent.
This includes transferring funds overseas and withdrawing charitable funds in cash.
The commission said it could extend the scope of the inquiry if any additional regulatory issues emerged.
The charity's chairman, Muhammad Bhaiyat, said: "Despite having no viable evidence the Charity Commission has abused its powers and halted our international operations.
"The alleged evidence that the commission have put forth as reasons for opening a statutory inquiry and placing restrictions on the movement of funds have no merit and we are confident that we will succeed in proving this and henceforth have initiated legal action.
"From the inception of Olive Grove Foundation not a single penny has been mismanaged or misused and every donation has reached the intended beneficiary."