The Charity Commission has opened a compliance case into a grant-maker that received £1.5m in unsecured loans from one of its trustees.
The Barrowman Foundation was founded in 2017 and is funded solely through money lent by its founder, the businessman Doug Barrowman.
The regulator said it had identified concerns with the charity, but did not provide any further details.
Barrowman made “unsecured, interest-free” loans to his foundation worth £532,941 in 2017/18, £622,051 in 2018/19 and £302,774 in 2020, according to its most recent annual accounts.
This means the charity’s annual income is listed with the Charity Commission as zero in each of three consecutive years.
In each year, total expenditure exactly matched the value of Barrowman’s loan.
The accounts say that its “main pledge” during this time was to the Prince’s Foundation, although the charity’s website also lists support for ActionAid.
Barrowman is one of three trustees at the charity, alongside his wife Michelle Mone, a Conservative peer, and Arthur Lancaster, who is a director of a firm that is part of Barrowman’s Knox Group.
In a tribunal hearing into his company’s tax affairs earlier this year, judges said Lancaster had been “evasive” in his evidence, and made statements that were “in some respects incorrect and littered with inconsistencies”, the BBC reported.
The telephone number for the foundation provided on the Charity Commission website is answered by Barrowman’s private firm Knox Group.
No one from the charity responded to a request for comment from Third Sector.
A Charity Commission spokesperson said: “We have now opened a regulatory compliance case into The Barrowman Foundation and will engage with trustees to assess concerns raised.”