A regulator on Thursday said it had opened a formal probe into donations received by a tycoon´s charitable trust which were intended for Prince Charles´ foundation.
The Charities Commission, which registers and oversees charities in England and Wales, said it had been in contact with the charity since media reports in September.
The inquiry will examine whether "certain donations received by the Mahfouz Foundation were intended for the charity, have been used in accordance with the donors´ intentions and if they should be returned to the donor or otherwise applied for charitable purposes".
It will also look to establish if the trustees "have carried out their legal duties and responsibilities as trustees in line with charity law".
The scope of the inquiry could be broadened if necessary, it added.
Taking to social media, Richard Palmer added, "It’s the latest crisis to hit The Prince’s Foundation following a cash-for-honours scandal."
It comes days after Michael Fawcett, the right-hand man to Prince Charles for decades, stepped down from his role running one of the British royal's main charities, weeks after a newspaper report that said he had offered honours in return for donations.
The prince's office, Clarence House, said the foundation would also stop using Fawcett's company, Premier Mode, which had organised events for the charity costing hundreds of thousands of pounds.
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