Stories about spending at Kids Company were 'salacious', High Court hears

Lawyers acting on behalf of a group of the charity's former trustees are contesting disqualification proceedings being brought by the Official Receiver

The Royal Courts of Justice in London
The Royal Courts of Justice in London

Stories about spending at the defunct charity Kids Company were described as “salacious” at the High Court yesterday. 

Representatives acting on behalf of former trustees of the charity, which collapsed in 2015, pored over what they described as mistakes in the Official Receiver's case, which began last week.

The OR is seeking to secure disqualification from senior positions for periods of up to six years against Bolton and six other trustees of the charity, plus Camila Batmanghelidjh, its founder and former chief executive.

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, described some of the stories around the charity's expenditure as salacious and designed to create hysteria. 

He said the court should consider getting rid of about a third of the documentation that had been put forward by the OR because its only use was to give the media a feeding frenzy.

“The case before the court needs no explanation of client expenditure,” he said.

Lesley Anderson, acting for the OR, objected to this assertion.

Bompas contested the OR’s interpretation of a letter sent to Batmanghelidjh in January 2014 by then Prime Minister David Cameron that stated: “I have asked Nick Hurd to work with Kids Company to enable you to achieve a sustainable financial footing”.

Hurd was the Minister for Civil Society at the time.

Part of the OR’s case is that charity’s business model was unsustainable.

“It’s surprising to me that this is the only way that the expressions by the Prime Minister could be understood,” said Bompas.

The full letter was read to the court in which it heard that Cameron also described his delight and pride in the work the charity did.

There was also some debate about the role and responsibilities of non-executive directors, and their agency and ability to act within the organisation. 

Daniel Margolin QC, a partner at JHA, said in his opening statement that the case brought against former trustee Erica Bolton was “unfair and oppressive”.

Margolin said the OR had failed to identify any allegations that concerned Bolton individually, as distinct from allegations made against all former trustees. 

This was important, he said, because under the Companies Act 2006 a director’s performance should be assessed in light of that individual director’s knowledge and experience.

This makes the allegations against Bolton unsustainable because her role was primarily focused on PR, not financial matters, he argued. 

“The OR has failed to discharge the burden of proving that Ms Bolton was so grossly negligent or totally incompetent as to endanger the public and therefore be deserving of a finding of unfitness,” said Margolin.

He also claimed that a vast amount of documentary material supporting the OR’s case was of highly questionable relevance, in a way which was oppressive.

Andrew Westwood of Maitland Chambers, who is representing former trustee Vincent O’Brien, said he had serious concerns about the way the OR had presented its case.

Addressing the questions of unfitness in the context of a charitable company he said: “The courts have always recognised that where criticisms are made of the past conduct of charity trustees which does not involve dishonesty or wilful misconduct, a benevolent approach should be adopted.”

Witnesses are due to begin giving evidence in the 10-week trial next week.

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