The Charity Commission opened a statutory inquiry into education charity Avicenna Global and its relationship with Avicenna Academy in Darnall.
The Commission is “concerned” that the school may have previously been operated by the charity before it was transferred to a trustee.
Avicenna Academy is an Islamic faith day school and is open to children aged four to 16.
It is rated ‘good’ by Ofsted and charges annual fees of between £1,400 and £1,900.
The principal and CEO of the school is Sulaiman Ahmed, who is listed as a trustee of Avicenna Global in the charity’s accounts.
Another trustee, Rouf Ditta, is chair of governors at the school, while Avicenna Global is listed on the school’s website as its proprietor.
Mr Ditta said the school will make a full statement once the inquiry is concluded, but noted that the Commission is only investigating the period between September 2013 and October 2016 and the charity’s former trustees.
He added: "Since the arrival of the new trustees the charity has been dormant. We hope that the charity commission conduct a fair and balanced inquiry, which includes investigating ex-trustees who were actively engaged with the charity during this period. We will be working with the charity commission so that they can ascertain all the facts."
The Charity Commission had previously found a number of “serious regulatory concerns” relating to Avicenna Global after “serious allegations” were made regarding the financial conduct of one of the charity’s trustees.
It is also concerned about the charity’s current board and its ability to manage conflicts of interest and make independent decisions, as two of the four trustees are siblings and a third is their brother-in-law.
A relative of a trustee has also been the independent examiner on the charity’s accounts.
The inquiry will look to determine whether Avicenna Academy was ever owned or operated by the charity and, if so, whether the decision to transfer the school to a trustee was “made lawfully” in accordance with the charity’s governing document.
It will also establish if there has been any unauthorised trustee benefit and whether the trustees have exercised their governance duties, in particular their duty to account for the charity’s funds and the management of conflicts of interest.