Durand Academy funding row 'has no legal basis'
The former head of an academy chain has hit out at claims of financial mismanagement telling the BBC he "completely refuted" the allegations.
The Education Funding Agency (EFA) announced on Monday it was terminating the group's funding.
It cited serious concerns about the management and governance of the trust.
But Sir Greg Martin told BBC Radio 5 Live Investigates the withdrawal of funding had "no legal basis".
The Durand Academy Trust (DAT) runs an infant and junior school in Stockwell, south London, and a boarding school for older pupils in Midhurst, West Sussex.
It has more than 1,000 pupils at its three sites and received £17m from the government to set up the school for weekly boarders in 2014.
The trust owns the schools, while a charity owns the land on which the schools are built, and two private companies provide services from the school.
The EFA, which supports building and maintenance programmes for schools, academies, free schools and sixth-form colleges, says the trust has failed to clearly separate the academy, the Durand Academy Trust, from its charitable arm the Durand Education Trust (DET) and two other businesses - London Horizons Limited and GMG Resource Management.
It wants to ensure no director of the trust that runs the school is also a director of one of the private companies.
Sir Greg, who founded the Academy Trust and is the current chair of the trust's board of governors, said it had taken "very clear legal advice" as to whether there was a conflict of interest between the three separate parts of the trust and was told there was not.
He added that when the EFA wrote to the trust in July outlining its concerns, the trust responded and provided that legal advice but had heard nothing back.
However, according to the EFA Sir Greg is a director and sole shareholder of GMG Resource Management and DAT entered into a contract with GMG Resource Management when he was both executive head teacher at DAT and a trustee at DET.
In the letter to Sir Greg the EFA added: "The terms of the 2012 GMG contract were not market-tested or put out to tender (despite advice from the EFA that they should be), but were substantially those proposed by Sir Greg Martin."
It has also demanded £1.8m is paid back to the academy trust from the charity - the Education Trust - where it has been sitting in its bank account since at least February 2015.
It has also called for Sir Greg to resign or to be removed as chair of governors.
But Sir Greg said: "There isn't a conflict of interest that has been identified on any occasion. Let's ask the EFA what the conflict of interest is because they haven't told us."
He added: "We have been told we have failed to comply [with demands from the EFA] but if we are being asked to comply with something that we shouldn't or can't comply with then of course we won't comply."
In the letter to Sir Greg, EFA chief executive Peter Lauener said there had been "repeated and significant" breaches of the terms of the funding agreement.
The letter, dated 11 October, said the academy trust had failed to comply with six out of eight requirements set out by the EFA.
The letter also questions why the academy has been charged for the use of a leisure centre, on one of its own sites, by its pupils.