By Luke Costin in Sydney

PAULINE Hanson and her right-hand man have rejected allegations of misappropriation after One Nation’s NSW branch was neutered by the loss of two of its three state MPs.

Mark Latham, the one-time federal Labor leader, and colleague Rod Roberts on Tuesday revealed they would sit as independent MPs in the state’s upper house.

Senator Hanson unseated Mr Latham as the party’s state leader when she led the replacement of the NSW executive two weeks ago, citing the failure of the party to materially lift its vote at the NSW state election in March.

“Can I say this whole sordid saga is not about election results but a pure grab for money in something that I will not be part of,” Mr Roberts said under parliamentary privilege.

The state party had undergone a Queensland “takeover” orchestrated to repeat “past attempts at defrauding NSW electoral funds”, Mr Latham alleged.

Mr Roberts cleared any former members of the NSW executive of impropriety but took aim in parliament at Senator Hanson’s chief of staff, James Ashby, labelling him under privilege a “conman, spiv and a fraudster”.

“I will not stand by and allow this to occur, nor can I be associated with a political party that acts unlawfully and without morals,” Mr Roberts said.

“This action has the grubby fingers and fingerprints of James Ashby all over it.”

Mr Ashby rejected Mr Roberts’ statement and questioned why the MP had not raised the allegations earlier with the party, the electoral commission or the NSW corruption watchdog.

“We’ve never been told that there was any money that was misappropriated,” Mr Ashby told Sydney radio 2GB on Tuesday.

He said recent changes to the party weren’t a surprise given Mr Latham had not spoken to the party’s federal leader since Senator Hanson condemned the MP’s derogatory comments about homosexual sex on March 30.

Senator Hanson also rejected the claims, saying the party’s finances in NSW and nationally were subjected to regular audits by chartered accountants and state and federal electoral commissions.

“I’d invite them to repeat these statements outside of the parliament, but they would never accept it because then they would be forced to tell the truth,” she said.

In a letter to NSW Special Minister of State John Graham, tabled in parliament, Mr Latham alleged more than $270,000 had been moved out of the state party and federal executive in recent years for merchandise and equipment.

In one instance, $102,000 in taxpayer funds paid to NSW One Nation after the 2019 election was allegedly redirected to the party’s Brisbane office and used to buy warehouse equipment and merchandise.

The party’s then-national director allegedly told Mr Latham: “We do things differently here and have lots of merchandise. This will pay for the federal election”.

All the money was repaid after his intervention, Mr Latham said.

The firebrand MP has been a key element of One Nation’s revival in NSW, leading the ticket in 2019 and 2023 and winning an eight-year term at the most recent poll.

Mr Roberts’ term ends in 2027.

Senator Hanson said the two men needed to accept responsibility for their own actions instead of blaming “literally anyone but themselves”.

“Because they have not taken any responsibility for the poor performance of One Nation at the 2023 NSW state election, the party has been forced to appoint a new state executive to review the organisation and improve our performance in future elections,” she said.

One Nation’s remaining NSW MP, Tania Mihailuk, said the departure of her former colleagues was disappointing but she would interrogate their concerns, which predated her switch from Labor to the minor party, and was open to reforms.

“No individual is bigger than our great party,” she said.