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Charity watchdog investigating transactions used to bail out Prince Charles's Scottish eco-village

The Telegraph logo The Telegraph 18/12/2021 Patrick Sawer, Hannah Furness
The Prince of Wales, photographed at the University of Cambridge last month - Getty © Getty The Prince of Wales, photographed at the University of Cambridge last month - Getty

A charity watchdog has launched an investigation into financial transactions used to bail out the Prince of Wales’s struggling eco-village in Scotland.

The Office of the Scottish Charity Regulator (OSCR) is already examining fundraising practices at the Prince’s Foundation, following allegations that the Prince of Wales' closest former aide co-ordinated with "fixers" over honours nominations for a Saudi billionaire donor.

Michael Fawcett resigned as the foundation's chief executive in November, amid claims he promised to help secure a knighthood and British citizenship for Saudi billionaire Mahfouz Marei Mubarak bin Mahfouz.

Mr Fawcett was involved in directing money from Mahfouz’s foundation to another charity of which the Prince was patron.

Now it can be revealed that the OSCR is also examining the way Lord Brownlow’s Havisham investment group stepped in to buy nine properties at Knockroon in East Ayrshire, where a new development of more than 700 homes was planned along the lines of Poundbury – the Dorset village built to reflect the Prince’s architectural and community values.

Widening scope of the investigation

In its accounts for the year up to March 2021, published last week, the Prince’s Foundation said the OSCR had widened the scope of its probe, stating: “The Office of the Scottish Charity Regulator, in addition to reviewing the Trustee response in relation to the press allegations made against the Foundation, also enquired into certain historical property transactions.”

The sale of the Knockroon properties had been intended to raise millions of pounds needed to restore run down Dumfries House, which Prince Charles acquired in 2007 along with the land for the eco-village, for £45 million, including £20 million borrowed through the Prince’s Foundation.

The sum has long since been paid off, but developers had been struggling to sell even the first phase of 31 houses after they went on sale from 2011, until Lord Brownlow stepped in to buy the nine properties as buy-to-lets and a cafe.

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Lord Brownlow was revealed this year to have also partly funded work to refurbish Boris Johnson’s flat at Number 11 Downing Street.

A spokesman for the OSCR told The Telegraph: “We are currently considering all the evidence we have gathered to support our own inquiry into these matters, and are continuing to work with the charity and others before we decide what action, if any, is required in this case.”

The Prince’s Foundation admitted in its accounts that the rows over donations risked damaging its reputation.

In its accounts, the Foundation states: “The findings of the report and the attendant legal advice highlighted a number of areas of risk to the Foundation. The risks identified and considered include the potential for legal, regulatory, employee and reputational risks. The trustees accept the reputational risk arising from these events as probable and note the possible risk of both legal and regulatory liability outcomes.”

Mahfouz has been one of the most prolific donors to Prince Charles’s charities, with the Mahfouz Wood at the 15th-century Castle of Mey named after him. The castle was formerly the Queen Mother’s home and is now one of the Prince’s Scottish residences.

Historic buildings supported by the Prince of Wales © Provided by The Telegraph Historic buildings supported by the Prince of Wales

Mahfouz’s donations of more than £1.5 million helped to fund renovations of residences used by the Prince, and other charitable ventures.

Clarence House has said that the Prince had “no knowledge of the alleged offer of honours or British citizenship on the basis of donation to his charities”.

The Prince’s Foundation would not comment specifically on the OSCR’s examination of transactions relating to Lord Brownlow, but in a statement Dame Sue Bruce, chair of its board of trustees, said it was considering the findings of the watchdog’s investigations.

She has previously said: “The board of trustees is determined that lessons will be learned to ensure that, in future, our charity maintains the highest standards in all areas and always acts with the utmost integrity and probity.”

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