Kids Company directors face being banned from charity or company directorships for up to six years

Kids Company collapsed in August 2015 following allegations of gross financial mismanagement

Former chief executive, Camila Batmanghelidjh, was not formally a director at the time the charity collapsed in 2015, but the proceedings will allege that she acted as a de facto director (Rex)

Former directors of defunct charity Kids Company face being disqualified from running or controlling any businesses for up to six years.

The Government’s Insolvency Service said on Monday that it had written to the directors informing them that Business Secretary Greg Clark intends to bring proceedings to have them disqualified from any such role for periods of between two-and-a-half and six years.

All nine former directors would be named in the proceedings, including Sunetra Atkinson, Erica Bolton, Richard Handover, Vincent O’Brien, Francesca Robinson, Jane Tyler, Andrew Webster and Alan Yentob, the charity’s former chairman and ex-BBC executive.

Former chief executive, Camila Batmanghelidjh, was not formally a director at the time the charity collapsed in 2015, but the proceedings will allege that she acted as a de facto director and should therefore also be disqualified from running or controlling other companies, the Government said.

Kids Company was founded in 1996 to provide support for inner city children. From an original drop-in centre in south London it expanded quickly, eventually boasting 11 centres, mostly within greater London. It secured more than £43m in Government funding but collapsed in August 2015 following allegations of gross financial mismanagement.

A committee of MPs in an official report later found that the charity had helped just a fraction of the children it claimed to be working with and had misused funds to pay for luxury items that “diverted” money from other projects.

It cited an audit of the charity’s books that found purchases of £305 designer shoes, John Lewis throws that cost £80 each and “four items of men’s outerwear costing £149, £105, £85 and £70”. The committee said such spending was “inappropriate, unwise and irresponsible”.

The report also castigated politicians all the way up to Prime Minister David Cameron for being “captivated” by Ms Batmanghelidjh and for authorising multimillion pound grants to the charity “outside the usual decision-making process”.

It particularly criticised the Cabinet Office Minister, Oliver Letwin, who, the committee found, failed to provide a “convincing justification” for ignoring the “comprehensive advice” of senior civil servants and handed over £3m to Kids Company just before it collapsed.

The committee said this was a dereliction of his duty in handling taxpayer money.

The Metropolitan Police also launched an investigation into reports of physical and sexual abuse at the charity, but it later said that it had found “no evidence of criminality”.