Charity directors face lengthy bans after loss of governance

Blog Insolvency

The Insolvency Service is to rule on sanctions handed out to trustees of a collapsed children’s charity, it has been reported.

Kids Company Founder Camila Batmanghelidjh, former BBC creative chief Alan Yentob, and eight other trustees have until December 20 to agree on voluntary boardroom bans.

The charity collapsed in July 2015 despite receiving £3 million in Government funding to support its services. A winding-up order was made against Kids Company on 20 August 2015 and was placed into compulsory liquidation soon after.

Several trustees of the board have been under an Insolvency Service investigation and are primarily blamed for the collapse of the charity.

The directors have been told that they face bans of between two-and-a-half and six years. A ban would disqualify them from acting as a trustee of a director of a company.

If the trustees fail to come to an agreement on voluntary disqualification, they will be subject to a formal ban which can carry longer terms.

In July, the Insolvency Service said: “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.”