The Charity Commission has opened a statutory inquiry into the Healthy Planet Foundation over concerns about its involvement with rate relief schemes and payments to companies linked to trustees.

The inquiry was launched last month after a Commission compliance case last October “highlighted a number of wider regulatory concerns” about the charity.

The original compliance case investigated the details of a £345,000 fraud complaint made by the charity to the Commission and police.

But the Commission said it was concerned about losses made by the charity as a result of legal action by a local authority over the rate relief scheme.

Healthy Planet Foundation chief executive Francesca Polini said today that the Commission’s concerns related to “former staff and trustees” who were dismissed in October 2014.

“I personally reported the fraud and other wrong-doings along with the other current trustees on the board to the police and Charity Commission ten months ago,” she told Civil Society News.

“We have ceased all of our working relationships with the people who we believe are implicated and there have been a number of arrests.

“We haven’t been able to say anything until now because of the police investigation, so we can’t say who the people are.”

Polini said the Commission’s concerns about payments made from the charity’s subsidiary company related to the “previous trustees” who no longer work for the charity.

“Our board is now down to two trustees. A number of them resigned because of the investigation - they didn’t really want to be connected to the charity – and a number of them we removed because we believed they were involved in the payments that are mentioned by the Charity Commission.”

The Commission said today it was concerned that the charity currently only has two trustees.

“The charity’s governing document requires that there be three trustees for quorate decision making,” it said.

As part of the statutory inquiry, the Commission will examine “the circumstances leading to the significant financial loss of charity funds via alleged criminal activity” and “trustees’ decision making when entering the charity into rates relief schemes and circumstances leading to the significant financial loss as a result of legal action taken by a local authority”.

It will also examine the “trustees administration, governance and management of the charity, in particular around the business model of the charity and its subsidiary and the dealings of the latter with other companies, including the management of conflicts of interest that may arise” and “whether or not, and to what extent, there has been mismanagement and/or misconduct on the part of the trustees in the administration and management of the charity”.