A former vicar accused of siphoning £1.9 million from a city charity’s accounts now faces losing his home.

The news emerged as one of the businessmen who accuses Canon David Collyer of making irregular payments to himself while at charity Midlands Regen revealed he had launched legal action against an audit firm to claim back some of its £1.9 million shortfall.

The former clergyman was forced into bankruptcy after being sued over a black hole identified in the accounts of Midlands Regen, the company behind the planned revamp of Nechells Baths.

Now, with the anniversary of his bankruptcy nearing, an insolvency firm revealed Canon Collyer’s Birmingham home is set to become part of the bankruptcy estate.

Insolvency company Griffins, the trustee, said it would be valuing the property and discussing with his wife, a co-owner, about the next step.

A spokesman for the trustee’s office said: “The family home does rest with the trustee but until 12 months after the rights of the occupier take precedence over the trustee’s right.

“With that now expiring we are looking to realise the estate’s interest in it.

“We will be looking to get a valuation and look at the mortgage and what our interest is. Repossession is something that can happen but it is a last resort. We generally try to find someone to buy the property from the estate, as that saves costs.”

Once the property has been sold it becomes part of the estate, which means funds potentially going back into the charity.

Canon Collyer was declared bankrupt in January in the wake of a lengthy legal battle over missing funds.

That came after Midlands Regen took him to High Court over allegations of improper payments – forcing him to agree to pay £800,000 back.

However, during the case Mr Collyer denied making irregular payments to himself in return for his services to raise funds for the scheme.

Nechells Regeneration Project
Nechells Regeneration Project

Midlands Regen had claimed there was a £1.9 million shortfall in funding – a situation which ultimately forced it to take out a mortgage on the property and a loan in excess of £1 million.

Now businessman Tim Watts has started action against Midlands Regen auditor Clement Keys for professional negligence, claiming the activity should have been uncovered.

Pertemps founder Mr Watts, the charity’s president, told the Post he was seeking a sum of £2 million and an apology from the accountancy firm.

The businessman claimed Canon Collyer had been siphoning money from Midlands Regen into his own company Lynton Marketing, and Clement Keys had been auditor of both.

A spokesperson from Clement Keys, said: “We can confirm that Midlands Regen Limited has issued a claim against Clement Keys. Clement Keys is taking legal advice in respect of the claim and it is therefore not appropriate to comment at this time.”

Canon Collyer was arrested on fraud charges in August 2012 and remains on police bail.

The Nechells Regeneration Project, which was completed in 2007, involved the restoration of the baths, which saw the dilapidated Edwardian structure transformed into a 21st century community facility providing training, crèche and offices for social enterprises. It was initially expected to cost £4.1 million but ended up costing around £5 million.

Funding included substantial grants from the European Regional Development Fund, the Heritage Lottery Fund and Advantage West Midlands.

However, Mr Watts said the Birmingham and Black Country Community Foundation, the charity behind the Nechells Regeneration Project, had prior to the baths scheme been able to distribute £40 million via 7,000 good causes, to the wider community.