There will be no regulatory action taken against former leaders of the defunct charity Kids Company, Third Sector has been told.
An email sent to former Kids Company trustees by a Charity Commission investigator, seen by Third Sector, says that after the conclusion of High Court proceedings the regulator can finish its investigation and remove Kids Company from the charity register.
The commission said it would not comment on a leaked email.
The email says: “The commission’s inquiry was opened on 20 August 2015 but its work was put on hold, and therefore delayed, by the investigation and action taken by the Official Receiver.
“It is only with the court’s judgment on 12 February that the commission’s inquiry is now able to resume and proceed to conclusion.
“We have carefully considered and been informed by the court’s judgment as well as the inquiry’s findings and can confirm that the commission does not intend to take any regulatory action against any of the trustees.”
The disqualification proceedings brought against the charity’s former chief executive, Camila Batmanghelidjh, and seven former trustees were dismissed by the High Court last week.
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 Official Receiver had been attempting to secure disqualification from senior positions for periods of up to six years against Batmanghelidjh, who it argued was a de facto director in her position as chief executive, and the group of trustees.
In its email to trustees after the judgment, the commission said it would draft an inquiry report that would set out its findings and conclusions.
This will be made available to the trustees for comments on its factual accuracy.
The email says: “We are unable to provide a timescale for this at present but will keep you updated as to the process.
“It is our policy to allow interested parties two weeks to comment on the factual accuracy of draft reports prior to their publication.
“We are also minded to, in due course, remove the charity from the register on the grounds that it is no longer operating.
“We will write formally to you on this matter at a later date and you will have a right of appeal against this decision.”
The commission’s email says that the legal proceedings brought by the Insolvency Service took precedence over its own inquiry, the results of which were put on hold to prevent any potential prejudice to the case.
The regulator intends to publish its concluding report as soon as possible.
A commission spokesperson said the regulator would not comment on a leaked email.
Third Sector had asked for an update on the case before the email emerged.
The regulator had said: “As well as the direct impact on the charity, its beneficiaries, staff and supporters, the collapse of Kid’s Company had a wider effect on public confidence in charities and so it is important that lessons are learned for the future.
“Following the High Court’s finding we can now move to conclude our own inquiry into the charity and we will carefully consider the judgment.”
Lawyers were last week critical of the case and said dedicated service by charity trustees “must never again be repaid by such gross injustice”.