Downing Street deliberately created a misleading impression about a major Conservative Party donor who was awarded a peerage by David Cameron last week, The Independent has learnt.

Ranbir Singh Suri, 79, a jewellery magnate who is one of Britain’s richest Asians, was elevated to the House of Lords at the request of the Prime Minister. He has donated more than £300,000 to the Tories since 2004.

In its official citation for the new peerages, the Government described the new Lord Suri as a “businessman” and “former General Secretary of the Board of British Sikhs”. But The Independent has established that the Board has not existed for more than 20 years and only involved four or five people.

At the time of his appointment, Tory sources also described Lord Suri as a leading figure in Britain’s Sikh community. But one prominent Sikh organisation said this amounted to a “bare faced lie”.

The Sikh Federation UK said in a statement: “He is no leading figure in Britain’s Sikh community and he is not associated with any of the leading Sikh organisations. Many in the Sikh community simply see Lord Suri as a businessman who has donated large sums of money [to the Tories].”

It added: “The Federation has been campaigning for over a decade to see more visible Sikhs in Parliament. On the one hand this move is welcome, but we would prefer each of the main political parties to have Sikhs in the House of Lords who are younger, there on merit and based on what they have to offer rather than those who are seen as ‘cronies’.”

According to records held by Companies House, the Board of British Sikhs was incorporated in 1990 and dissolved two years later. One person familiar with the group said it “fizzled out” after a couple of meetings and did not feature in any Sikh activities. “It didn’t get off the ground,” they added. The Board’s last registered offices were 38 Berwick Street in London’s Soho – the previous address of Lord Suri’s jewellery company, Oceanic Jewellers Ltd.

There is no suggestion of any wrongdoing on the part of Lord Suri, who was a magistrate for more than a decade and built up Oceanic into a successful international business after establishing it in 1976. In 2009 his family’s fortune was estimated to be £40m.

But one member of House of Lords, who declined to be named, said it was “disturbing” that the Government had wrongly suggested he was a prominent Sikh. “It seems to show that they’re not in touch with the community at all – which is no surprise,” they said.

The Sikh Council UK, the largest Sikh representative body in the country, said it had never worked with Lord Suri. “We have not come across this individual before,” said Gurmel Singh, the Council’s secretary general. “The first time I heard of him was when his name was mentioned [as a new peer].

“While we welcome the appointment of a Sikh to the House of Lords, the general feeling in the community is that it would have been good to have somebody who could speak on a range of issues. It would also have been good if he was known for his contributions in the Sikh community.”

Kulwant Singh Dhesi, president of the British Sikh Council, said he had never heard of Lord Suri. “I’ve never met this person. I can’t even recognise his face,” he said.

A Number 10 spokesman said: “All appointments to the House of Lords are vetted by the independent House of Lords Appointment Commission. Beyond his extensive career in business, Ranbir Suri has devoted the last 40 years to a range of charitable and voluntary positions, including General Secretary of the Board of British Sikhs in 1991/92.”

The House of Lords Appointments Commission is responsible for vetting nominations for new peerages. Bhai Amrik Singh, chair of the Sikh Federation, said the inaccuracies about Lord Suri raised questions over whether the Commission itself had been misled.

The Labour MP Yasmin Qureshi added: “There are questions to answer here, not least for the Government who, on elevating this Tory donor to the Lords justified it on the basis that he held a post which doesn’t seem to have existed for over a decade.

“Was the Appointments Commission aware of this, and what conversations have they had with the Conservatives over the suitability of this appointment? People will rightly want to get to the bottom of this issue before another Tory donor is sworn in to the Lords.”​

One of Britain’s richest Asians, Lord Suri has been an active member of the Conservative Party for more than 30 years. A member of the Renaissance Forum, an exclusive dinner club only open to those who have donated more than £10,000 to the party, he has described Mr Cameron as “delightful and a good leader”.