The Charity Commission has opened a statutory inquiry into a Jewish charity over concerns that investments in property in the USA have resulted in losses of £1.7m to the charity.

The Commission announced today that it opened an investigation into Friends of Biala Limited in January to investigate concerns about the charity’s financial management and governance in connection with loans and invested funds in properties in the USA.

The inquiry is only being made public now as the regulator had to make “further investigative enquiries, including in relation to the financial management of the charity”, before informing trustees that an inquiry had been opened.

The charity, which provides and fosters religious education in accordance with the Orthodox Jewish Faith and promotes the relief of poverty, had an income of £53,221 in 2013 but is 54 days late in filing its most recent accounts.

In its review of activities and achievements in its accounts for the year ending March 2013, it says that the “trustees have invested in the development of property in the United States being of the opinion that the returns available would exceed that available in the United Kingdom”.

The inquiry will examine whether the trustees discharged their “duties and responsibilities as charity trustees, in particular their responsibilities when making investments on behalf of the charity and whether conflicts of interest were properly managed”.

It will also examine whether there had been a breach of trust by the trustees in relation to their legal duties.

The charity’s accountancy firm and registered contact detail, Rosenthal & Co, said it could not comment on the investigation.