A Bexley councillor has been suspended from the board of the Co-Operative Group after allegedly misrepresenting his qualifications in a new scandal involving the bank.
Munir Malik, Labour councillor for Thamesmead East and the finance spokesman for the Bexley Labour group, is being investigated over the claim, made when seeking election to the Co-op board, that he was a chartered accountant.
Mr Malik, of Cambridge Avenue, Welling, was also suspended by the Labour Party after it became aware of the investigation on Friday.
The probe into Mr Malik by Co-op board members was initiated after chief executive Euan Sutherland launched a review of the group’s records.
Mr Sutherland himself quit last month after declaring the organisation is "ungovernable".
A spokesman for the Co-operative Group said: "Munir Malik is currently suspended as a director of the Co-operative Group pending the outcome of a board investigation in relation to the qualifications stated in his election materials."
A spokesman for the Institute of Chartered Accountants in England and Wales said: "Mr Malik was a member from 1974 until March 25 1991 when he was declared bankrupt."
Nobody from the Bexley Labour Party would comment on the allegations but one member admitted it was "a shock" when they heard the news.
Teresa O'Neill, Conservative leader of Bexley Council, told News Shopper the allegations were "shocking" and "sad".
She said: "We do find the situation shocking.
"Mr Malik has spoken about the Co-Op at previous council meetings and he said that things at the group were going to change.
"He is Labour's finance spokesman and is responsible for the fiscal policy which is all over the leaflets which are being sent out in the run-up to the (local) election.
"The reality is do residents want a party, like us, with a proven financial track record or one that do not?
"The fiscal Labour policy has been calculated by Mr Malik and it lacks credibility. It's a very sad situation."
Last week the Co-op Bank announced a £1.3 billion loss for 2013 and launched an emergency plan to raise £400 million to plug a hole in its finances.
Mr Malik said: "I denounce the comments of Councillor Theresa O’Neill, which I believe to be politically motivated and based on inaccurate information in the media.
"The Co-operative Group matter is confidential to the board and has not yet considered these allegations.
"I took up articles and started training as a chartered accountant in 1967 and qualified in October 1974, after satisfying the Institutes requirements as to education, approved training and examinations.
2I automatically ceased to be a member of ICAEW on 25 March 1991, due to the very unfortunate events of that day. "Since 25 March 1994, I have the right to reapply for membership of ICAEW, as my qualification was still valid.
"All my working life has been spent as a former chartered accountant, having qualified as an FCA, as a senior auditor and as a senior manager in the profession, in Industry and in Local Government.
"I gained extensive expertise in the world of finance, audit and management, which has given me the basis for playing an effective role as the shadow cabinet member for finance and corporate services and on the Audit and Pension Committees as a local councillor."
The Co-op Group, which now owns just 30 per cent of the bank, will unveil its own results next week and a loss of more than £2 billion is expected.