“This action has the grubby fingers and fingerprints of James Ashby all over. He is a con-man,a spiv and a fraudster – and I want anybody having dealings with him to be extremely careful.”

In his brief explanation to the upper house,Latham claimed his resignation was over the Queensland One Nation’s “takeover” of the NSW branch and efforts to defraud the division’s electoral fund.

The pair’s departure leaves Tania Mihailuk as the lone One Nation MP in Macquarie Street. The former Labor MP was not present in the chamber for her colleagues’ resignations.

Mihailuk confirmed in a statement she would remain as a member of the party.

Speaking on Chris O’Keefe’s 2GB program on Tuesday afternoon,Ashby rejected the claims,saying they were “completely false” and it was the first time either he or Hanson had heard of them.

“Awfully disappointing,number one;but just completely false as well,which is what I find shocking. And secondly,Chris,they’ve done it on the floor of parliament in coward’s castle,” he said.

“They wouldn’t have the courage to come out and say it publicly.”

Ashby questioned why Roberts,who was a member of the state executive at the time of the alleged impropriety,had failed to report the misconduct before today.

The decision to cut Latham loose had been driven by myriad factors,including the “vile” slur he made against Sydney MP Alex Greenwich,Ashby said.

A statement from the One Nation NSW branch also rejected the allegations,with,state director Amir Batish saying he had full confidence in Hanson’s leadership.

Latham’s most recent allegation involved redirecting funds received by NSW One Nation from the state’s Electoral Commission Fund – used to reimburse political parties for administrative and operating expenditure – in September 2021 to the party’s head office in Brisbane.

“Payments from the … Administration Fund had been redirected to the party’s Brisbane office where,in turn,they had been used to purchase conveyor belts,other fixed equipment and PHON merchandise,” he alleged.

There were two improprieties,Latham alleged:first,transferring NSW taxpayer funds interstate;and using those funds on equipment and merchandise sitting in Brisbane,rather than on running the NSW party.

Senior government sources said the allegations contained in the letter had been referred to the state’s electoral commission.

In the letter,Latham said he threatened to go to both the NSW Police and the NSW Electoral Commission unless the $102,000 was immediately repaid to the party’s state bank accounts.

“Due to my actions,[PHON national director Rob] Miles and the Brisbane offices relented,and I was able to resolve a situation which was causing great distress to our NSW One Nation officials,” he alleged.

“I understand that this financial misappropriation and repayment is still under audit and investigation by the NSW Electoral Commission”.

The second accusation involved the party pushing for the NSW campaign to purchase $170,000 more in electoral merchandise than what was required – a scheme he ultimately stopped.

Latham alleged he discovered the plot was to claim the full $200,000 in electoral expenses,while storing the $170,000 worth of excess merchandise in warehouses ahead of the 2019 federal election campaign.

“I found out about this and told our NSW campaign director to only claim the genuine $30,000 in expenses and return the remainder of the merchandise to Queensland for their payment and ownership,” he alleged. “I believe this is what occurred.”

As part of the three-page letter,Latham urged Graham to consider three reforms to electoral laws in NSW to combat the problems he described.

First,banning the expenditure of NSW Administration Funds on merchandise;second,requiring all officials and executive members of a registered political party to live in NSW;lastly,requiring all NSW Electoral Commission funds paid to political parties to only be spent within the state.

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