The Charity Commission is investigating a Sikh religious and education charity due to serious concerns with its financial management.

Nanaksar Thath Isher Darbar, registered charity number 1025988, came to the regulator’s attention after it failed to submit annual reports for 2013/14 and 2014/15.

Announcing a statutory inquiry into the charity, the commission said it had further concerns when the Nanaksar Thath Isher Darbar’s auditors identified a number of matters including “weak and informal financial controls”.

The regulator said it also found “unsatisfactory record keeping” in the charity’s annual report for 2012/13, submitted in December 2015.

Nanaksar Thath Isher Darbar has objects including the advancement of the Sikh religion by the provision of facilities for study and worship and the advancement of education. It furthers these objectives through owning land used by the Guru Nanak Multi Academy Trust for an academy school.

It also runs three Gudwaras, providing educational courses, organising events and multi-faith conferences to promote the Sikh faith.

The commission said the charity’s trustees purchased a football ground in Hayes in July 2010, planned as a site for a school. However, trustees were unable to obtain planning permission for the school and subsequently developed the site into a temporary school car park.

But the regulator said trustees had failed to obtain planning permission for the construction, resulting in enforcement action being carried out by the London Borough of Hillingdon.

“The trustees have lodged an appeal,” the regulator announced. “The commission 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 assets.”

The commission said the trustees also own the freehold of school buildings and the leasehold of adjoining playing fields. Both of these sites are occupied by the Guru Nanak Multi Academy Trust, a separate charity which is not subject to investigation.

“Prior to the formation of the academy trust, the trustees used these sites as securities against loans/mortgages,” the regulator said. “The trustees are now in default and this raises a significant risk to the charity’s property. These serious concerns have prompted the commission to open a statutory inquiry.”

In a statement issued through solicitors Penningtons Manches, Nanaksar Thath Isher Darbar said trustees are working with the commission to address the concerns raised.

“The trustees recognise that there were historic weaknesses in their governance structure and since their initial engagement with the commission have already taken significant steps to strengthen their governance processes. They are continuing to improve their governance arrangements and striving to comply with best practice,” the statement said.

The charity said it is working with the Guru Nanak Sikh Multi Academy Trust, the Charity Commission, the Department of Education, and professional advisers to ensure that there will be no disruption to the education of the pupils and students at the academy schools.

In a separate statement, The Guru Nanak Sikh Multi Academy Trust stressed it is a separate entity and not the subject of the investigation.

“The academy runs two schools, both of which have provided outstanding education for the local community. The academy wishes to reassure all its pupils, students and their parents that there will be no disruption to the education of the children whilst the inquiry into the charity is ongoing,” the trust said.

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