The Charity Commission confirmed it is conducting a statutory inquiry into the Sikh Youth UK.
Britain's counter-terrorism officers said they have charged a British Sikh duo with fraud offences relating to charitable funds after they had been arrested back in July.
Rajbinder Kaur, 50, is charged with money laundering and six counts of theft amounting to 50,000 pounds and 38-year-old Kaldip Singh Lehal is charged with providing false or misleading information to the UK's charity watchdog Charity Commission.
The Birmingham-based pair, believed to be related as brother and sister, are linked to Sikh Youth UK and were arrested on July 3 by the West Midlands Counter Terrorism Unit (WMCU).
"Kaur has been charged with money laundering, six counts of theft amounting to 50,000 pounds and one count under Section 60 of the Charities Act 2011 - knowingly or recklessly provide false or misleading information to the (Charity) Commission," a West Midlands Police statement said.
"Lehal has been charged with one count under Section 60 of the Charities Act 2011 - knowingly or recklessly provide false or misleading information to the commission. They have been bailed to appear at Birmingham Magistrates Court on October 31," the statement said.
The Charity Commission confirmed it is conducting a statutory inquiry into the Sikh Youth UK.
"We have worked closely with the police to support their investigation. We intend to publish a full report setting out our findings on conclusion of the inquiry," a commission spokesperson said.
The British Sikh outfit describes itself as a national organisation raising awareness on social evils and supporting the victims of sexual grooming, substance abuse and domestic violence within the community.
Some of its activities have included commemorating those who died during the ''Operation Blue Star'' at the Golden Temple in Amritsar in 1984.
It is not a registered UK charity, but the country's independent charities watchdog said it has jurisdiction over its activities due to the funds being charitable.
The Charity Commission said its inquiry will examine all aspects of the group's functioning as well as its status in order to determine whether it is a charity in law.