The Royal Albert Hall has been referred to the Charity Tribunal due to conflict of interest concerns on its council.
The Charity Commission said seats given to families that financed the hall’s construction in the 1860s were being sold on for considerable profit.
It said that as seat holders held a majority on the hall’s governing council, this raised “an inherent unresolvable conflict of interest”.
A spokesperson for the hall said it was disappointed by the decision.
A spokesperson for the Charity Commission said: “The question is whether these arrangements enable the council to be perceived as furthering the purposes of the charity for the public benefit.
“We have been engaged with the hall for some time and, while progress has been made in some areas, the central issue of how to deal with the conflicts of interest, and suggested private benefit, remain unresolved and the hall has shown minimal appetite to address these.
“Due to the complex nature of these matters, we gained the consent of the Attorney General to refer a number of questions to the Charity Tribunal.”
A spokesperson for the Royal Albert Hall said: “We are disappointed to hear that the Charity Commission has taken this route.
“Over many years, the hall has engaged in a meaningful way to resolve what is a complex set of issues, however the commission has chosen to refuse to meet us, whilst pursuing what has been a costly and drawn out route.
“Whilst we will, of course, cooperate with this process, our focus will remain on entertaining audiences and to enhance our considerable charitable activities.”