The UK charity fundraising regulator, Fundraising Standards Board, has launched an investigation into the Salvation Army over complaints that they charity may have lied to donors about the use of profits generated from sales of second-hand clothes.

The inquiry follows allegations that one businessman somehow earned 10-million pounds sterling by selling secondhand clothes donated to the cause.

In addition, a director of the charity's trading arm reportedly earned more than 5-million pounds from sale of the clothes over the last five years. (He was subsequently able to afford a racehorse and a 1-million pound mansion).

Salvation Army has it written on the side of its charity boxes that profits from sales of its clothes are used to help the Salvation Army's work with people in need both at home and abroad.

The sector sets incredibly high standards in self-regulation and takes this issue extremely seriously as public trust and confidence is the cornerstone of ongoing giving, said Alistair McLean, the chief executive of the standards board.

The [Fundraising Standards Board] responds to specific concerns from the public about fundraising activities and plays a crucial mediatory role in both protecting public interests and in ensuring charity members are committed to fundraising best practice by being honest, open, clear and accountable in their fundraising activities.

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