The disqualification proceedings brought against Camila Batmanghelidjh and a group of former trustees of the collapsed charity Kids Company have been dismissed.
The High Court judgment today rejected the case brought by the Official Receiver against Batmanghelidjh, founder and former chief executive of the charity, and seven other trustees of the charity at the time it closed abruptly in 2015.
The court also found that the charity might have survived if what turned out to be unfounded claims of abuse involving service users had not been made.
The OR had been attempting to secure disqualification from senior positions for periods of up to six year against Batmanghelidjh, who it argued was a de facto director in her position as chief executive, and seven trustees.
That included Alan Yentob, the former BBC creative director who chaired Kids Company for 18 years, and Richard Handover, the former chair and chief executive of the retailer WHSmith.
The OR’s case, in part, was that the trustees ran an unsustainable business model, and should have been able to see the charity was heading for financial meltdown.
But Justice Falk dismissed all disqualification proceedings during a remote High Court hearing to announce the verdict today.
“The allegation is not made out against any of the directors and they are not unfit,” said Falk. “In other words, the case against them fails.
“In relation to Batmanghelidjh, the conclusion reached was that she was not a de facto director, so that it is not necessary to decide whether she was unfit.
“However, the decision indicates that had it been necessary to decide that question, a disqualification order would not have been made against her.”
Falk said the decision was based on the court’s detailed findings and that, while aspects of the charity’s operating model were high risk, it was not unsustainable in principle.
“If it had not been for the unfounded allegations it is more likely than not that the restructure would have succeeded and the charity would have survived,” added Falk.
During the 10-week trial, which concluded in December, some of the trustees had made an impassioned defence of the charity’s work, and Batmanghelidjh always maintained that she had been battling to hold the charity together in the face of insubordination, rumour and misinformation.