Posted: Sun Feb 14, 2021 1:25 pm
Kids Company founder and former trustees win disqualification fight
The founder and former trustees of the collapsed charity Kids Company have won a High Court battle against being disqualified from other organisations.
The Official Receiver argued they were "unfit" to hold directorships because of their handling of the charity.
But the ruling cleared former chief executive Camila Batmanghelidjh and the seven others of personal wrongdoing.
The judge added the charity may have survived had it not been for unfounded allegations of criminal activity.
A plan to restructure the organisation's finances had been agreed with David Cameron's government.
But the charity closed its doors in 2015 after the Metropolitan Police launched an investigation into sexual assault allegations, following the broadcast of a BBC Newsnight report.
The police investigation concluded in 2016 after finding no evidence of criminality.
In her ruling, Mrs Justice Falk said the charity, which worked with hundreds of vulnerable children in London and Bristol, may have survived financially to continue its work had it not closed.
During the lengthy court battle, the Official Receiver - a body that looks into potential wrongdoing by company directors - had alleged that the charity's former leaders should be disqualified as directors because the organisation had been so badly run.
In the run-up to its collapse, the charity was spending around £20m a year, up to a quarter of which came from the government.
The Official Receiver alleged that Kids Company's business model had become unsustainable from around September 2013 and its failure was inevitable.
It also alleged that the defendants knew or ought to have known that and should have planned to avoid financial collapse.
The charity's chairman at the time of its collapse, who was also cleared by the ruling, was the former BBC executive Alan Yentob.
Mrs Justice Falk said the case was not proven.
"There was no allegation of dishonesty, bad faith or personal gain," said the judge.
"There was no allegation of inappropriate expenditure in relation to any of the children assisted by Kids Company.
"The allegation is not made out against any of the directors and they are not unfit. The case against them fails.
"While aspects of the charity's work were high-risk, the business model was not unsustainable."