Nine Former Directors to Face Consequences of Kids Company Failings
The Business Secretary, Greg Clarke, has notified the 9 former directors of the high profile Kids Company charity of his intention to commence director disqualification proceedings against them for periods of between two-and-a-half and six years. The matter will now be tested in court, so we cannot speculate on the outcome. This article looks briefly at the case, and suggests that in general, before such matters go to Court, a crucial window of opportunity exists for the well advised director to make representations to the Insolvency Service regarding their culpability.
Brief Background to This Director Disqualification Case
In August 2015 Kids Company was wound-up by order of the Court amid allegations of financial mismanagement. The Company is understood to have been the recipient of significant public funds during its life and so this case will provide interesting reading as to what truly went on behind the scenes in the day to day running of the Company. Kids Company, founded in 1996, was of course a once Prime Minster backed charity.
The Insolvency Service Press Release makes clear that the director disqualification proceedings will name all nine former directors: Sunetra Devi Atkinson, Erica Jane Bolton, Richard Gordonn Handover, Vincent Gerald O’Brien, Francesca Mary Robinson, Jane Tyler, Andrew Webster and Alan Yentob. Mr Yentob was Creative Director of the BBC at the time of the collapse.
The 9th to be targeted is the charity’s high profile former chief executive Camila Batmanghelidjh who was not a director at the time of the collapse. She has also been provided with notice of an intention to commence proceedings on the basis that she acted as a de facto director and therefore, as the Insolvency Service say,
“[she should also] be disqualified from running or controlling other companies”.
It seems that even directors of high profile charities face the consequences of bad financial management. The targeted directors of Kids Company will now presumably have a window of time and opportunity to make representations to the Insolvency Service as to their individual responsibilities and whether or not they are culpable.
We cannot predict or speculate on the outcome of this case. In our experience, however, as specialist director disqualification solicitors, the well advised director would now grasp this opportunity and provide details of all relevant matters to the investigators to try and head off the intended proceedings.
The Secretary of State as Claimant will, as he is required to do by statutory obligations, consider very carefully what each director has to say. It is not unusual for the Claimant to abandon the intention to pursue a particular director based on these representations during this crucial window of time, often after a face to face meeting.
The key is to know how to best put across what needs to be said for the particular director on the particular set of facts of a case.
The solicitor team here at NDP is well used to doing precisely this for its director clients who are facing the threat of disqualification. Click here to see some of our testimonials.
If you are threatened with director disqualification, contact us or call us on 0121 200 7040. for a FREE initial discussion of your case.