Kids Company founder says charity collapse ‘inevitable’ after ‘unverified safeguarding allegations’

The founder of Kids Company claims the former charity’s collapse was “inevitable” because it “became a victim of its own success” and lost funders following a news report of “unverified safeguarding allegations”.

The charity, which supported vulnerable children and young people in London and Bristol until it was wound up in 2015, attracted a number of celebrity backers including former prime minister David Cameron, Coldplay, artist Damien Hirst and comedian Michael McIntyre.

Its closure came shortly after police launched an investigation, which was eventually dropped seven months later, into allegations of abuse and exploitation at the charity, following the broadcast of a BBC Newsnight report.

Proceedings are being brought at the High Court in London against the founder and ex-chief executive of Kids Company, Camila Batmanghelidjh, and seven of its former trustees, including the BBC’s ex-creative director Alan Yentob, who was chairman of the charity.

Ms Batmanghelidjh (pictured), who began giving her evidence on Monday, said she believes the charity was “attacked by envy” and that its demise was “politically driven”, in part to attack then prime minister Mr Cameron ahead of the EU referendum.

In an affidavit before the court running to more than 100 pages, Ms Batmanghelidjh said the charity’s ethos was to “reach out to the children who needed us with unrelenting love”.

She also said the charity “fell victim to the moral panic” in the wake of the Jimmy Savile scandal, which she said meant that “even a hint, or a rumour, of sex abuse occurring within an organisation would cause irreparable reputational damage”.

Ms Batmanghelidjh said: “In its lifetime, Kids Company became a well-known phenomenon that attracted widespread attention that was both very good and very bad.

“As its detractors started gunning for its demise it also became the subject of false and misleading stories planted in the media, many of which seemed to be maliciously motivated.

“I have my own theories as to who was behind the negative campaigning but, suffice it to say, this once highly successful charity and social campaigner was finally brought down when an unverified safeguarding issue was irresponsibly fed directly to BBC’s Newsnight programme and then broadcast without fact-checking, or a police investigation.

“By the time that Kids Company was cleared of wrongdoing it was too late, goodwill had deserted us and funders withdrew their support so that its end became inevitable.”

She said that, before the broadcast, the charity had managed to “secure a year’s funding ahead, as well as being able to clear all its liabilities and have three months reserves” and that she had been working to streamline the operation to respond to the “Government’s apparent retreat from its original plan to provide circa £20 million of central funding”.

She added: “As a result, Kids Company was probably not insolvent at the point of its winding up and, even if I am wrong, I do not believe it would have passed the point of no return, but for the broadcast of the safeguarding allegation.”

Ms Batmanghelidjh said it was “surprising” that Dominic Cummings, now senior aide to Prime Minister Boris Johnson, was “briefing against the charity in public” in 2015 when he had “no dealings with it”.

She said: “I feel it is now unfair to reach critical conclusions about the performance of the board, and of me, without paying due regard to how Kids Company started, why it existed, how its profile grew, how it became so successful and what caused its demise.

“I believe the demise of Kids Company may have been politically driven both to silence its child protection advocacy and attack David Cameron in preparation for the Brexit referendum.

“I found it surprising that Dominic Cummings was briefing against the charity in public in 2015 when he had never visited it, so far as I am aware, or had any dealings with it.”

Ms Batmanghelidjh said she recognised the charity was a “victim of its own success and that the demand for its services was outstripping its capability to manage”.

The Official Receiver (OR), which is bringing the case against Ms Batmanghelidjh and the former trustees, argues they are “unfit” to hold company directorships as a result of their handling of the charity and is asking Mrs Justice Falk to disqualify them, which they are opposing.

The OR argues that Ms Batmanghelidjh was a “de facto” director of the charity, which she denies, and is seeking a six-year disqualification for her.

Ms Batmanghelidjh said that, because of a number of difficulties she has, including dyslexia, she “would never have taken on the challenge of being director of a company”.

She added: “While I created the concept of Kids Company in 1996, I have always made sure that I have around me highly capable people to undertake the functions that would be beyond me.”

Ms Batmanghelidjh said in her affidavit that she believes the proceedings are “unjust” and is asking the court to dismiss the claim against her.

She said: “Kids Company was created because of the hard work of tens of thousands of volunteers, staff, donors and the trustees over nearly two decades.

“The organisation changed lives for the better, whilst it could never be perfect the faults attributed to it by current proceedings are unjust.”

During cross examination by Lesley Anderson QC, for the OR, Ms Batmanghelidjh denied “circulating loans” to make it appear that Kids Company was able to repay its creditors.

“I had a good relationship with donors and they understood our difficulties – it wasn’t my intention to break any promises but clearly we weren’t able to pay (loans) back and there was a good reason for that,” Ms Batmanghelidjh said.

“Circumstances wouldn’t allow me to pay them back,” she said.

The OR argues that donors were asked to provide loans and then pressured into converting the loan in whole or in part into a donation.

Ms Anderson said: “That was part of the modus operandi, wasn’t it?

“To get loans in and hope you might be able to get the lender to convert it to a donation.

“Am I right or am I wrong?”

Ms Batmanghelidjh replied: “You are wrong.”

She also denied having sole control over the charity’s loans and how to prioritise repayment, insisting that everything was overseen by Kids Company’s trustees.

She said she did not dispute the OR’s point that some loans were not repaid on time, but disputes that it was deliberate.

“We did intend to pay back these individuals, but circumstances didn’t allow us to pay back at a particular time – when we were able to pay back, we did,” she said.

The court heard that, by the summer of 2014, Kids Company owed a total of £1.29 million to various creditors.

Ms Batmanghelidjh denied securing loans without the oversight of trustees.

Ms Anderson said: “There is nothing to suggest that the overall level of loans had been approved or that the number of loans had been approved in advance.”

She asked: “Is it that you got the loans and after you got them, it was a bit too late to do anything about it?”

Ms Batmanghelidjh insisted that the trustees would have challenged her if they were concerned about the number of loans she was taking out.

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