Attempts to disqualify Camila Batmanghelidjh, the founder and former chief executive of the defunct charity Kids Company, from being a director are "a modern-day witch trial", according to a statement from her lawyer.
Batmanghelidjh and eight former trustees of Kids Company are the subject of disqualification proceedings being brought by the Insolvency Service under section 6 of the Company Directors Disqualification Act 1986. Kids Company collapsed in 2015.
Normally, it is only trustees or directors of a company that can be disqualified under the act, but the Insolvency Service is arguing that, despite being chief executive, Batmanghelidjh was a de-facto director of the charity.
Media reports over the weekend suggested that the directors had been given a deadline of 20 December to accept a five-year ban or face legal proceedings that could result in a ban of up to six years.
A statement today from James Nicholls, a partner at Gunnercooke LLP who is representing Batmanghelidjh, said she was contesting the case "because the thousands of children who placed their trust in Kids Company should know that their trust was honoured and the charity did nothing but fight for their care".
The statement said Batmanghelidjh was also challenging, as a matter of principle, "a government system that seeks to silence those who advocate for the vulnerable".
Nicholls said: "If ever there were a modern-day witch trial, this is it. Ms Batmanghelidjh is a powerful and charismatic woman who challenged the establishment.
"She repeatedly pointed out to government departments that destitute children were being failed. For 20 years she tirelessly raised money for these children. Now government is trying to silence her by trashing her reputation with trumped-up allegations."
Nicholls’ statement pointed out that many of the directors of high-profile companies that had collapsed since the disqualification act came into force avoided disqualification, and the Insolvency Service "has decided to make maximum publicity out of seeking to disqualify the well-meaning and generally competent trustees of an amazing charity".
"The case against Ms Batmanghelidjh will fail, but by the time that happens she will have spent years under the cloud of suspicion and she will be hampered from to continuing help destitute children," the statement said.
"Every accusation against her will be refuted or shown to be so trivial that it is contemptuous of a department of state to raise it."
It is likely that the case will take at least two years to come to trial, the statement said, and could include examination of senior politicians at the time of the charity’s collapse, including the former Prime Minister David Cameron.
The Insolvency Service declined to respond to the statement, but in July said it was seeking disqualifications of between two-and-a-half and six years for the former directors of Kids Company.
The trustees of Kids Company declined to comment further about the Insolvency Service’s case. The trustees issued a statement earlier this year that said they would "robustly defend" themselves against the disqualification proceedings.