The Liberal democrats, a partner in the ruling coalition in the UK is at the centre of a conflict-of-interest row over nominating NRI entrepreneur Raj Loomba as its peer, a leading daily claimed on Sunday.
Mr Loomba, founder chairman of the Loomba trust, was one of 15 Lib Dem nominations that were scrutinised by the house of lords appointments commission in October before being given their peerage.
'The Mail' has claimed that there was a conflict of interest as Lord Navnit Dholakia, the party's member of the commission, has been on at least six overseas trips in the past four years in his role as a patron of Loomba's charity.
Two of the visits, to New York and Toronto, took place in October and November — at the time the three-man commission was examining peerage candidates.
A liberal democrat statement said: "Lord Dholakia was not involved in the vetting of any individuals put forward by the liberal democrats."
A spokeswoman later added Lord Dholakia supported giving Mr Loomba a peerage because of his "good works".
The lords appointments commission was created in 2000 to provide impartial scrutiny of a candidate's achievements before they are appointed.
Members conventionally absent themselves from discussions over their own party's nominations. The two other members of the Commission were Labour's Baroness Dean of Thornton-Le-Fylde and former conservative foreign secretary Lord Hurd.
Mr Loomba, who arrived in the UK from his native Punjab in 1962, has a business empire worth 10 million pounds, mainly dealing in children's cloths.
Commenting on his peerage, Mr Loomba said: "I am very pleased, it's very humbling."