Ajay Jagota stepped down as chairman of the South Shields Conservative Association (SSCA) earlier this year following allegations he was the target of a racist remark.
He has now defected to the new party to stand in European Parliament elections due to be held on Thursday, May 23.
But the lettings agency owner will not be representing the UK’s North East region, instead he will be contesting a seat in the North West region.
Previous reports in the national media had incorrectly stated he would be seeking to win over voters in London.
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Mr Jagota quit as chairman of SSCA in January alongside Gerard Leake, chairman of the Jarrow Conservative Association.
It was claimed that at a Conservative Party event on September 22, Coun Jeff Milburn, the only Tory councillor on South Tyneside Council, made an offensive remark about Mr Jagota to Mr Leake.
Mr Jagota and Mr Leake later resigned their positions, saying their party had failed to fully investigate the incident.
Coun Milburn, who represents Cleadon and East Boldon, councillor is currently suspended from the party while the accusations are investigated.
Mr Jagota and the Conservative Party have been contacted for comment.
James Harrison , Local Democracy Reporting Service