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Kids Company bosses seek voluntary board bans

(c) Sky News 2017: <a href="http://news.sky.com/story/kids-company-bosses-seek-voluntary-board-bans-11101884">Kids Company bosses seek voluntary board bans</a>
 

The former trustees of Kids Company are seeking to avoid court action by agreeing to voluntary boardroom bans in the aftermath of its collapse.

Sky News has learnt that lawyers for a number of the charity's ex-directors are in talks with the Government's Insolvency Service about giving formal undertakings not to serve as company directors for several years.

The individuals seeking to offer such undertakings are thought to include Alan Yentob, the former BBC creative director who chaired Kids Company's trustees, although he could not be reached for comment this weekend.

:: Kids Company bosses face bans of up to six years

According to guidance published by the Insolvency Service, individuals who are subject to proceedings to ban them can either defend the case in court or offer a "disqualification undertaking" which involves voluntarily submitting to a ban.

The voluntary route can result in individuals agreeing to slightly shorter periods of disqualification, according to insiders.

It also avoids them having the ignominy of a formal ban against their names, even though the outcome is effectively identical.

The latest development comes three months after eight former Kids Company trustees, and its founder, Camila Batmanghelidjh, were informed by the Insolvency Service that they faced bans of between two-and-a-half and six years.

While Ms Batmanghelidjh was not on the charity's board, it is being argued in the legal action that she "acted as a de facto director".

It was unclear this weekend how many of the nine people subject to the Insolvency Service proceedings were in talks about offering undertakings.

Kids Company's former trustees included Richard Handover, a former boss of WHSmith, Vince O'Brien, former chair of the British Venture Capital Association, and Jane Tyler, a former partner at the law firm Macfarlanes.

A spokesman for the Insolvency Service declined to comment.

In July, it issued a statement saying: "We can confirm that the Insolvency Service has written to the former directors of Keeping Kids Company informing them that the Business Secretary intends to bring proceedings to have them disqualified from running or controlling companies for periods of between two-and-a-half and six years.‎

"As this matter will now be tested in the court it is not appropriate to comment further."

The charity's former trustees have been aware since April that Insolvency Service officials were minded to seek their disqualification.

Kids Company's collapse in 2015 sparked a huge political controversy, because of the backing it had received from David Cameron, the then Prime Minister.

Mr Cameron backed a £3m Government grant to the charity little more than a month before its demise, arguing that its work meant it was worth "one more go" to secure its future.‎ ‎ Ms Batmanghelidjh, who was awarded a CBE during Mr Cameron's premiership, ran the charity on a £90,000 annual salary and vehemently defended its governance even as it lurched towards bankruptcy.

Kids Company claimed to support 36,000 children and young adults, working with those who were struggling with mental health issues after being involved in gun and gang crime, or who were suffering from neglect.‎

In total, it received £42m of public money over a 15-year period - although some media reports have put that figure at as much as £50m.

It eventually closed its doors, though, after the Metropolitan Police launched an investigation into allegations of abuse at the charity.

A damning report by MPs (BSE: MPSLTD.BO - news) in February 2016 outlined an "extraordinary catalogue of failures", with its board of trustees reliant on "wishful thinking and false optimism".

Mr Yentob chaired Kids Company for 12 years, but stepped down from his BBC role four months after the charity's collapse, saying his continued service was "proving a serious distraction" to the Corporation.‎

He continued to be paid a six-figure sum last year by the BBC for presenting Imagine, an arts programme.

Mr Yentob had been accused of editorial interference after criticising BBC journalists' coverage of Kids Company's financial problems.