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Kids Company operated high-risk business model, says Charity Commission

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he former charity Kids Company operated a “high risk business model”, according to a regulator’s report which said there was mismanagement and alleged that records were destroyed.

The Charity Commission (CC) said the celebrity-backed charity for vulnerable youngsters relied heavily on grants and donations from key fundraisers and donors, and its low reserves meant it was more vulnerable to external pressures.

It has made a formal finding of “mismanagement in the administration of the charity” over the failure to pay creditors, including its own workers, on time.

In response, founder Camila Batmanghelidjh has said she intends to seek a judicial review, calling the report a “corrupted attempt” to “justify its mistaken decision to conduct an investigation in the first place”.

David Cameron was a supporter of Kids Company (Jacob King/PA) / PA Archive

The regulator’s report, concluding its inquiry launched in 2015, said trustees allowed spending to increase without a secure stream of income to cover increased costs or mitigate an unexpected fall in fundraising.

They should have acted sooner to improve financial stability, and a higher level of reserves could have allowed the charity to avoid liquidation or to merge with another charity when donors’ confidence was shaken, it added.

Kids Company supported vulnerable children and young people in London and Bristol, attracting a number of celebrity backers including former prime minister David Cameron, Coldplay, artist Damien Hirst and comedian Michael McIntyre.

The charity was wound up in 2015. Its closure came shortly after police launched an investigation, which was dropped seven months later, into allegations of abuse and exploitation at the charity, following the broadcast of a BBC Newsnight report.

Last year, a bid to ban Ms Batmanghelidjh and seven ex-trustees from being company directors was rejected by a High Court judge.

Mrs Justice Falk said the public “need no protection from these trustees”, calling them a group of “highly impressive and dedicated individuals”.

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