A charity set up by Arron Banks, the insurance entrepreneur and political donor, was inadequately administered and its website “risked misleading the public”, the UK charity watchdog said on Thursday.

Mr Banks and several of his business partners set up the Love Saves The Day Foundation in 2014. The organisation registered with the Charity Commission in June 2015 to support charitable causes in Belize and Lesotho, among other places.

But the Charity Commission began reviewing the charity’s affairs last year, following allegations about discrepancies between its claims about its philanthropic efforts and financial records.

The Charity Commission did not find any misuse of charitable funds at the charity. Yet its conclusions, published on Thursday, are likely to raise further questions about Mr Banks’ statements regarding his financial affairs. Mr Banks’s finances have come under scrutiny as part of a separate regulatory probe into Leave.EU, the Brexit campaign that he co-founded.

Love Saves The Day Foundation’s website indicated it had made more than £700,000 of donations to projects both in the UK and internationally, including a charity set up in Lesotho by Prince Harry. But the charity’s accounts revealed it had made no charitable grants, and its trustees told the Charity Commission that the donations referred to on the website had been “made in a personal capacity by one of the trustees”.

The Charity Commission ordered the charity’s trustees to take down its website “as a matter of urgency”. The charity was wound down and removed from the register of charities at the end of May.

The website was taken down, but a version of it remained available on Squarespace until Wednesday, when the Financial Times made enquiries of the charity’s representatives.

In its report published on Thursday, the Charity Commission said a £10,000 donation the charity was due to receive was never transferred to it. Instead, the trustees had instructed the donor to transfer the money to another unnamed charity that had similar objectives, according to the report.

The watchdog said any funding provided by trustees to a charity has to be declared as income.

“By not doing so, the trustees were not properly accounting for all charitable funds,” the Charity Commission said. “We therefore considered that there had been a serious flaw in the administration of this charity.”

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David Holdsworth, deputy chief executive of the watchdog, said: “Setting up a charity is a valued responsibility, but not one that should be entered into lightly. Those that run charities must remember that they have important legal duties towards the charity.”

Andy Wigmore, Mr Banks’s spokesman, said last year that the charity never traded or accepted donations.

Responding to the Charity Commission’s report, Mr Banks said: “How I choose to make donations to charity is my business and my business only.”

He added that the Charity Commission’s claim that Love Saves The Day Foundation’s trustees fell short of expectations was “utter rubbish”.

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