Liam Fox's adviser Adam Werritty facing questions over 'missing' £60,000.
Liam Fox's best man Adam Werritty has been ordered to repay £60,000 given to him to cover the debts of the former defence secretary's controversial charity.
He is being threatened with legal action by multi-millionaire Tory Party donor, Michael Hintze, a long time supporter of Dr Fox, who gave him the cash.
The money was handed over weeks before the organisation was formally wound up after an investigation ruled it was breaking charity law and Mr Hintze now wants to know what happened to his money, which is described as "unaccounted for".
The charity, Atlantic Bridge, set up and chaired by Dr Fox, and run by trustees including Defence Minister Lord Astor of Hever, was shut down in September after the Charity Commission questioned its "independence from party politics".
Now details of the "missing" money are set to reignite the scandal surrounding Dr Fox who was forced to resign last month over his relationship with Mr Werritty.
A Cabinet Office inquiry found Dr Fox guilty of breaching the ministerial code after it emerged Mr Werrity was claiming to be Dr Fox's adviser and had set up a number of unofficial lobbying meetings with businessmen for the then defence secretary.
The Sunday Telegraph can reveal that Mr Werritty is now facing a formal demand from lawyers representing Mr Hintze to repay the cash he requested to pay winding up costs of the charity.
Mr Werritty, Atlantic Bridge's only British employee and who was paid more than £90,000 in wages and expenses, has been warned that he could face legal action if the money is not returned.
The 33-year-old businessman is already facing a possible police investigation over how he used cash given to another organisation, Pargav, amid allegations he used it as a slush fund to pay for international travel, five star hotels and hand made suits and bar bills at a lap dancing club.
Now it can been revealed that acting as Atlantic Bridge's executive director, Mr Werritty asked Mr Hintze to donate £60,000 to the organisation last August during a period when the work of the charity, set up to foster the so-called "special relationship" between Britain and America, had been formally suspended.
He was told the money would be used to wind up the organisation.
Mr Hintze, who runs hedge fund CQS, told him he was not prepared to gift the charity the money and instead arranged for a formal commercial loan from his firm to the charity's American arm, Atlantic Bridge Inc.
The loan was arranged by Mr Werritty and an unnamed American law firm acting for the not-for-profit US organisation.
Mr Werrity is understood to have signed the loan forms and the money was wired to an account in the US.
However Amanda Bowman, Atlantic Bridge's American chief executive, claimed she knew nothing about the loan or what had become of the money.
She said: "I have no idea about any of this."
The revelation also raises new questions about how Atlantic Bridge in the UK was being run. Patrick Minford, one of Atlantic Bridge's trustees, suggested little control was kept over how the charity spent its money.
He described the defunct charity as "a very small affair", indicating that the board did not routinely take formal minutes of their meetings.
Professor Minford said: "As far as the minutes of the trustee meetings... they were just ordinary routine meetings to approve accounts and that sort of thing. They were all pretty routine. Atlantic Bridge was a very small affair.
"There wasn't anything much at all really in the way of minutes that I am aware of to be honest.
"I went along to some meetings, probably once a year, we looked at what was going on and said yes this is fine, and have we got the money for it. There was a very small budget."
A spokesman for Mr Hintze said he was seeking a formal guarantee from Mr Werritty that the money will be repaid.
Last week lawyers acting for Mr Hintze sent out letters "demanding clarification of the loan and its status".
Sources close to CQS, Mr Hintze's firm, said Atlantic Bridge's US arm had shutdown its website but was still officially registered with the US tax collection department, the Internal Revenue Service.
The source said that the letters made it "very clear" that the loan was to "Atlantic Bridge in the US" and CQS was "in correspondence with their lawyers".
But the source added that it was Adam Werritty who had directly requested the money.
At the time, the source said, CQS "assumed he had the full authority of the trustees to request the money" but "with doubts being raised about Atlantic Bridge" it has called in its lawyers to investigate.
Atlantic Bridge US law firm and Mr Werritty, who were both involved in arranging the loan have been written to and told "they will either pay back the loan under the terms it was lent or face formal legal action", the source said.
The source added that the loan was made in good faith and exactly how it was going to be paid back "remained unclear".
"The money has so far not been accounted for," the source said.
A spokesman for Mr Hintze said: "Mr Hintze was a donor to Atlantic Bridge, he made those donations in good faith.
"It was a registered charity and had a board of eminent trustees. It was never to fund Werritty's lifestyle, globe trotting or anything else."
The spokesman confirmed Mr Hintze's firm CQS had loaned the organisation money towards "winding up costs". The spokesman added: "No client money is involved."
He added: "Mr Hintze has no connection with Pargav. One of his employee's Oliver Hylton, who was an adviser on charitable matters to Mr Hintze, was a director of it.
"He was initially suspended and now has left the company."
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