Lord Bhatia is locked in a legal dispute with the Ethnic Minority Foundation amid allegations that he spent £600,000 of its money on himself.
Lord Bhatia, who was suspended from the House of Lords following the expenses scandal, has been accused of using more than £600,000 of charity money to fund his own lavish lifestyle.
The 81-year-old businessman and former chairman of the Ethnic Minority Foundation (EMF) has been accused by the charity of using its money to pay for a personal chauffeur, his family’s private medical insurance and other inappropriate expenses.
It is also alleged that Lord Bhatia claimed mileage expenses from the charity for journeys he had already submitted through the parliamentary expenses system.
It is alleged between 2009 and 2010 Lord Bhatia submitted double claims for mileage on 138 times at a cost of £1,500 to the taxpayer.
The allegations were made in a report broadcast on the BBC’s Newsnight programme, last night. (Wed)
Lord Bhatia was introduced to the House of Lords by Tony Blair in 2001 as one of the so called people’s peers following the abolition of the hereditary system.
Three years ago he was caught up in the parliamentary expenses scandal when an official report concluded that he had been claiming overnight expenses for a second home he did not live in.
He was suspended from the House of Lords for eight months and ordered to repay £27,000.
These latest allegations relate to the EMF charity which Lord Bhatia co-founded in 1999.
The charity, which invests in good causes in India and the UK, is estimated to generate around £1 million each year, mostly from its extensive property portfolio.
But accounts seen by Newsnight, allegedly suggest that Lord Bhatia was misappropriating funds for his own personal use.
Chartered Accountant Anil Bhanot, who took over as the charity’s Treasurer in 2012, told Newsnight, he was shocked by the scale of the alleged financial mismanagement.
According to Mr Bhanot’s report, Lord Bhatia spent more than £150,000 on a personal chauffeur, more than £20,000 for private medical insurance for his family and more than £75,000 on the salary of a family member on the payroll.
It is even alleged that he spent around £800 of the charity’s money on Duty Free for himself.
The charity is now claiming the total amount of misappropriated funds exceeds £625,000.
The trustees of the charity confronted Lord Bhatia with the allegations last December and he immediately resigned.
The peer, who has denied the allegations, has since launched legal action against the charity accusing it of unfair dismissal.
He has also launched separate proceedings against EMF to recover £250,000 he says he loaned the charity and never got back.
Lord Oakeshott, who has called for radical reform of the House of Lords, told Newsnight: “We’re sadly used to expenses fiddling on a large scale in the Lords. But to be accused by a charity of milking them for £625,000, is breath-taking.”
Lord Bhatia said he was unable to discuss the allegations because of pending court actions.