Manchester children's charity Umbrella Ball 'did not pay out'

Organisers Oliver Lilley and Alex Khan say the charity event had failed to cover its costs

A fundraising ball held in aid of two children's charities at a Manchester hotel has failed to provide any money, a BBC investigation has found.

The Royal Manchester Children's Hospital and another children's charity have complained to charity watchdogs and police about the event last July.

The Umbrella Ball was organised by Manchester-based A-Magazine.

Its editor said the event had failed to cover its costs and donations of £3,500 offered to the charities were rejected.

The organisers also said inviting celebrities to the event "served only to increase costs and contributed minimally to the fundraising".

The ball was held at the five-star Blu Radisson hotel and was attended by footballers, models, reality TV personalities and business figures.

It garnered positive publicity the following day when a newspaper reported it had helped raise thousands of pounds.

But BBC North West Tonight has discovered neither charity has received any money.

The Umbrella ball event was attended by a range of local celebrities

Donation envelopes for one of the charities were placed on all 20 tables at the event, and several guests have said they left cash inside.

An online auction was also held, with a £7,000 luxury yachting holiday hailed as the main prize.

Neither the Royal Manchester Children's Hospital Charity or the second charity - which asked not to be identified - has received any money from the auction.

Sarah Naismith, director of the hospital charity, said it had no involvement with the planning of the event.

She said the charity tried on "several occasions" to contact the organisers and eventually received a "final response" informing them the event "had not made a profit".

Ms Naismith added: "The charity asked for evidence of this and it has not been received."

The BBC has discovered the technology firm that ran the auction collected the proceeds and was instructed to pay £8,827 into a company account set up by A-Magazine's editor Oliver Lilley using the name Oliver Torpey.

Oliver Lilley and his business partner said they acted with the "best intentions"

Five months after the event, Mr Lilley's business partner Alex Khan told the hospital charity it had made a loss.

Mr Khan said he offered to pay a total of £3,500 to the charities but they refused and asked to see the event's accounts.

Both charities then reported the matter to Action Fraud, the UK's national reporting centre for fraud and cybercrime.

Action Fraud said it was working with police and the Charity Commission "to determine which could be best placed to lead on a possible investigation."

The Fundraising Regulator, which also received a complaint, said it hoped to produce a report on the matter by July.

A-Magazine's editor Oliver Lilley and his business partner Alex Khan issued a statement through their lawyer.

They said £1,250 in cash donations, including those placed in the charity envelopes, was collected on the night but offered no explanation of what happened to the money.

The Umbrella Ball was held at the five-star Blu Radisson hotel in Manchester

Mr Khan did offer a payment of £3,500 to the charities - which the pair say was more than actually raised - but believe this was rejected by the charities after a breakdown in relations, the statement continued.

It also blamed ill-health of Mr Lilley and an administration error for the failure to account for the proceeds.

It said: "Our clients acted with the best of intentions but have been unfairly criticised.

"They sincerely regret that the ball was not more successful. It is our intention to provide accounts to the charities together with their donations."