Britain's charities watchdog has opened a statutory inquiry into the workings of Bhaarat Welfare Trust citing a number of "serious regulatory concerns" about the financial management of the Hindu charity.
The Charity Commission said it had identified a "number of serious regulatory concerns" about the financial management of the Trust, which is based in Leicester.
This included an alleged inability to account for funds transferred to India between April 2010 and March 2015.
"The Commission conducted a books and records inspection at the charity in May 2015, and identified a number of serious regulatory concerns about the financial management of the charity.
"In particular the Commission had concerns about the ability of the trustees to account for funds transferred to India between 1 April 2010 and 31 March 2015, the basis on which donations for a specific project were held, unmanaged conflicts of interests and whether Gift Aid (tax exemption) had been validly claimed by the charity," the commission said in a statement yesterday.
The Commission, however, stressed that opening an inquiry is "not in itself a finding of wrong doing".
"The charity has objects to promote the Hindu culture and religion, to advance education and to relieve poverty. It carries these out by making grants, primarily overseas. The Commission has been engaging with the charity since 2013, but found serious issues when it visited the charity in 2015," the statement added.
The trust is yet to comment on the investigation.
According to the Commission's website, Bhaarat Welfare Trust had an income of 1.2 million pounds and spent 1.3 million pounds in the previous year until March 2016.
The trust is run by four Indian-origin trustees, including founder Kantilal P Unnadkat, Diptiben Bharat Mistry, Narayan Sharma and Jesbir Kaur Uppal.
The inquiry will examine whether the trustees acted prudently in relation to the financial administration and management of the charity and whether they have complied with and fulfilled their duties and responsibilities as trustees under charity law.
The Commission said it also had serious concerns about legal action taken by the charity in relation to an ongoing dispute with another Hindu charity, calledShanti Dham, over a funds dispute and whether use of charitable funds on this action is justifiable.
In August 2015 the UK's charity regulator issued an action plan for the trustees to address these concerns.
However, it said that the charity's response provided in November 2015 was "lacking".
Bhaarat Welfare Trust, which characterises itself as "BWT India Aid" on its website, says it has a partnership with over 180 NGOs across India and has been instrumental in educating thousands of children and sponsoring millions of mid-day meals for schools in the country.