Charity Commission opens statutory inquiry into Kids Company

21 Aug 2015 News

The Charity Commission has opened a statutory inquiry into Kids Company, which collapsed last week, and the High Court has appointed the Insolvency Service as the liquidator.

The Charity Commission has opened a statutory inquiry into Kids Company, which collapsed last week, and the High Court has appointed the Insolvency Service as the liquidator.

The Commission has previously been looking into concerns at the charity as part of an operational compliance case and yesterday upgraded its investigation to a statutory inquiry.

In a statement today it said: “In light of the intense public scrutiny and speculation over the charity’s activities, and the increasing number of allegations in the public domain about its governance and financial management, the Commission has now formalised its engagement in a statutory inquiry in order to investigate and put on the public record whether or not these allegations are found to be true.”

The regulator added that trustees are cooperating.

Earlier this month Kids Company closed its doors because it could not pay its debts as they fell due. Its founder, Camila Batmanghelidjh, has since blamed “rumour-mongering civil servants, ill-spirited ministers and the media” for the charity's demise, saying that "unfounded" allegations of sexual abuse caused philanthropists to withdraw offers of funding. 

Liquidator appointed

The Insolvency Service was appointed as the liquidator for Kids Company, at a High Court hearing yesterday.

A multi-agency meeting took place on 13 August between the statutory bodies engaging with Kids Company. The work of the Official Receiver takes precedence over the Charity Commission.

At a hearing at the Companies Court, which is a division of the High Court, Registrar Sally Barber appointed Matthew Stone, senior examiner and deputy official receiver at the Insolvency Service, as the Official Receiver.

Barber made an order to bypass the need for place an official advertisement about the case before making an order to wind up the company because the directors had filed the petition, the charity has already ceased to trade and there had been widespread media coverage of the events.

Barber said it was “lamentable” that an organisation with “good intentions should come to such an end”. But that “regrettably it is now insolvent and all attempts at rescue and restructure have not worked”.

Any company that supplied goods or services to Kids Company for which they have not been paid should contact the insolvency service. Details of how to do so can be found here.

Former Kids Company employees to sue

More than 40 former employees of Kids Company are looking to sue after losing their jobs without any redundancy pay when the charity collapsed.

They have approached the law firm, JMW Solicitors, which is planning to launch employment tribunal proceedings.

Carl Moran, partner at the law firm said: “We are at an early stage in the process but we are being contacted by an increasing number of Kids Company’s former employees and are currently collating client details with a view to commencing Employment Tribunal proceedings over the course of the next month or so. We have had well over 40 enquires and are getting new enquiries all the time.”

Pop-up foodbank

This week Camila Batmanghelidjh, along with former staff members, opened a foodbank in a railway arch near Loughborough Junction station.

Volunteers handed out food to around 150 people on Wednesday under the name Kids Dining Room.

Batmanghelidjh told the Evening Standard newspaper that: “It will be a vital service and a new lifeline for young people in London who feel so desolate.

“We are trying to create a secure base for them with staff they already know and trust.

“It is a simple beginning for the group but I’m sure it will grow and see the amazing work people from Kids Company did continue.”

A Charity Commission spokesman said that the regulator had not received an application to register the new organisation as a charity.

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