Allegations that cash flow projections at former charity Kids Company were “fictional” were challenged by defence lawyers at the High Court yesterday.
Diane Hamilton, interim finance director at the charity between July 2014 and January 2015, was giving evidence on behalf of the Official Receiver.
Andrew Westwood of Maitland Chambers, who is representing former trustee Vincent O’Brien, questioned Hamilton about a meeting with the Charity Commission that took place in July 2015, just weeks before Kids Company collapsed.
The meeting included Mandy Lloyd, director of development, and Adrian Stones, director of human resources. The recorded minutes described cash flow projections as “fictional.”
Hamilton could not recall who made the allegation at the meeting, however, she said: “The reason why it says that is it became apparent they [the cash flow projections] were overly optimistic.”
Restating the seriousness of the allegation Westwood asked: “Optimistic or fictional?”
“There are items in the forecast that are never going to be possible, you see it week after week, they are never going to happen,” said Hamilton.
Westwood asked if Hamilton had shared these concerns about financial projections with trustees earlier in the year.
Hamilton said it was an issue she would have raised, and that she had sent an email in January 2015 questioning their accuracy, but Westwood replied that it did not say the forecasts were being made up.
At the time the charity was hoping to receive additional funding from the government, the court heard.
Previous evidence given at the trial suggested Kids Company had been repeatedly "fobbed off" by the government for additional funding.
The OR is seeking to secure disqualification from senior positions for periods of up to six years against O’Brien and six other trustees of the charity, plus former chief executive Camila Batmanghelidjh.
The court heard that documents to be presented at finance committee meetings were not always shared in time to be cleared with Hamilton in her role as interim finance director beforehand, and were sometimes cleared through Batmanghelidjh instead.
Hamilton said she often raised this process for reviewing documents as an issue, but Westwood replied: “We have never seen an email by you raising that.”
The court also heard that Hamilton was not always comfortable with the cash flow projections made by Batmanghelidjh.
Earlier, Westwood had put it to Hamilton that O’Brien and the other trustees had sought to put contingency plans in place as a result of concerns raised about the charity’s expenditure.
Westwood also described O’Brien as a “lone voice” among the trustees who often questioned financial projections.
He contrasted that with part of the OR’s case that the directors at the charity felt that trustees did not have a level of control or presence on a day-to-day basis.
Defence lawyers had previously tried to establish that the OR’s investigation into Kids Company was “thoroughly unfair”, and again Westwood pointed out omissions in Hamilton’s affidavit that might suggest O’Brien was, in fact, taking a regular interest in the charity’s challenging financial situation.
George Bompas QC, of 4 Stone Buildings, and acting on behalf of former trustees Richard Handover, Francesca Robinson and Alan Yentob, who chaired the charity for 18 years, also highlighted a number of omissions between the documents attached to Hamilton’s affidavit, and those submitted to the OR.
He had previously described stories about the charity’s spending as “salacious.”
The trial, which is expected to take 10 weeks, continues.