A Birmingham charity which is the biggest in the country for providing housing to asylum seekers is facing closure after losing Government contracts worth £11 million in the wake of a fraud inquiry.
Astonbrook Housing Association based on Moseley Road, Highgate, is being investigated by police following allegations of misuse of public funds.
The Charity Commission - a watchdog that regulates UK charities - put the association under the interim management of Birmingham accountants Baker Tilly last year.
On Wednesday, 15 people were dismissed by the accountancy firm which also terminated Astonbrook’s lucrative five-year contract with the Home Office this week, effectively cutting off its income.
Last night the Astonbrook - most of whose 150 staff are Somalian - hit back claiming it had been victimised by the Charity Commission because it was a black-run charity.
It also accused Baker Tilly of siphoning off £1 million in fees while overseeing its destruction and stressed no charges had been brought despite a year-long investigation.
Saeed Omar, director of Astonbrook, said: "It is the biggest charity to be run by black and ethnic minorities. We have been discriminated against. We feel the Charity Commission took our charity and gave it to someone who sucked out our money.
"They sucked out our money without doing anything. Baker Tilly ran the company for a year. Their duty was to look after the charity and preserve it until new trustees were appointed.
"They have destroyed the charity and nobody will speak about the £1 million they have taken. We feel Baker Tilly handed back the contract to stop anyone investigating this."
Astonbrook - which was set up by a group of former Somali asylum seekers in 2002 - gained the biggest Government contract to provide homes for asylum seekers two years ago.
Since then it has received almost £20 million in public money providing accommodation for refugees in the Midlands, South West, Wales and Yorkshire.
But the charity - which also has an office in Erdington - was raided by police last July following concerns raised by Birmingham City Council and the Home Office. Seven managers were arrested and released on bail.
A spokeswoman for West Midlands Police said: "This is a long and complex investigation and any charges will be communicated in the usual manner."
Baker Tilly last night refuted the criticisms made by Mr Omar.
"We categorically reject any suggestion undermining our undertaking as interim managers of Astonbrook which has been a challenging and complex project involving an ongoing fraud investigation which remains current.
"The fees and costs involved, which have been approved by our appointers the Charity Commission, have not in any way impacted upon services to the beneficiaries of the charity who remain our priority."
The UK Border Agency - a Home Office department responsible for immigration control - said it made "no apologies for demanding that tax payers get value for their money and asylum seekers receive an adequate service".
The Charity Commission said it would release full details about the case when the inquiry reached its conclusion.