Kids Co boss ‘ bullied her staff and ignored a cash crisis’
She boasted of ‘special relationship’ with HMRC
THE founder of Kids Company used a ‘threatening and bullying’ tone with colleagues and ignored warnings about the dire financial state of the now-defunct charity, a court heard yesterday.
Camila Batmanghelidjh is said to have begged former PM David Cameron to bail out the charity by quadrupling Government funding.
She also boasted of a ‘special relationship’ with HMRC which meant a tax bill need not be paid. The allegations came at a High Court hearing brought by The Official Receiver.
It claims Miss Batmanghelidjh, along with seven former senior employees, should be banned from being company directors for repeated failures to act to stop the charity’s collapse in August 2015. Among the co-defendants is Kids Company’s former chairman Alan Yentob, an ex-BBC executive.
Kids Company, which helped troubled children in South London, was given £42million of public money, including £3million sanctioned by Mr Cameron just days before its collapse.
Opening the case, Lesley Anderson QC, for the Insolvency Service, said: ‘The directors were repeatedly warned about several issues that went to the overall business model, but took insufficient heed. What they did do was too little, too late’
She said a ‘perfect storm’ had been allowed to emerge which included relying too much on ‘ad-hoc loans without any adequate reserves’. It operated an ‘unsustainable business model’ in which it repeatedly put ‘spending ahead of its income’.
By summer 2014, it had an income deficit of £4million. But trustee directors failed to do anything ‘of any consequence until November 2014 when the company was in meltdown’.
Former HR director Adrian Stones is said to have met with Miss Batmanghelidjh in December 2014 in which he expressed concern ‘about the legality of trading’ because trustees may become liable for the company’s debts.
But she allegedly largely dismissed the concerns, saying she would ‘take full responsibility for all of this’ and that she could ‘ justify all her spending decisions’.
Later that month she is also said to have been dismissive of then director of public engagement, Jane Caldwell, telling her she needed to ‘go away over Xmas and consider whether she wanted to be part of [Miss Batmanghelidjh’s] “heroic narrative”.’ In a meeting with senior employees she is said to have used a ‘threatening and bullying’ tone.
Miss Batmanghelidjh was the
‘Unsustainable business model’
‘de facto director’ of the charity, which she founded in 1996, despite not being on the board of trustees.
After Ms Caldwell told Mr Yentob the charity was facing a ‘financial crisis’, Miss Batmanghelidjh is said to have turned confrontational.
Recalling the episode Ms Caldwell said: ‘Your response was to shout at me and to say the only problem was me saying there was a problem.’
The court heard that in a letter to the company’s trustee directors in February 2015, Miss Batmanghelidjh told them: ‘I also don’t accept the explanation of my being too overpowering for people to talk to me... I’m not going to be a puppet chief executive.’
Kids Company enjoyed backing from high-profile celebrities such as the rock band Coldplay, author JK Rowling, comedian Michael McIntyre and artist Damien Hirst.
Miss Batmanghelidjh and the other seven defendants deny the allegations and do not agree that they should be banned from being company directors.
The hearing continues.