Police investigate another Jasper charity

A charity connected to the Mayor of London's former aide Lee Jasper has been shut down over fears it was being run improperly.

Ethnic Mutual has been closed for three months after failing to satisfy watchdog the Financial Services Authority that it was of real benefit to the community.

The organisation - which has received more than £1 million from the Mayor's London Development Agency and the Government - was already at the centre of an investigation into the misuse of public funds after it emerged that it diverted £ 18,000 to the African Caribbean Positive Image Foundation, a group that no longer exists and of which Mr Jasper was director.

The married father-of-nine said the loan had been arranged by Emerson Braithwaite, a fellow director, without his knowledge.

Mr Jasper quit his £120,000-a-year post as director for equalities and policing for the Greater London Authority two weeks ago in disgrace, after the disclosure of a series of embarrassing emails and mounting questions over the grants row. These were uncovered by an Evening Standard investigation.

Four other City Hall projects with close links to Mr Jasper are also being investigated - the Brixton Base, Diversity International, the European Federation of Black Women Business Owners and the Deshbangla Foundation.

The FSA said Mutual Ethnic received £350,000 from the LDA last year, and £713,600 from the Department of Trade and Industry over the last two years.

After a full-scale investigation, the FSA concluded that the charity was "not following its rules, and not operating for the benefit of the community".

It has now had its FSA registration suspended for three months. The FSA first investigated Ethnic Mutual at the invitation of the LDA.

Mr Jasper's resignation followed pressure over £3.8 million paid by the LDA to groups linked to him or associates. He denies any wrongdoing.