A member of the House of Commons public administration committee has told BuzzFeed News and BBC Newsnight that Kids Company founder Camila Batmanghelidjh and chair Alan Yentob "didn't tell us the truth", after two senior figures at the Charity Commission appeared to contradict their evidence in parliament on Tuesday.
William Shawcross, the chair of the Charity Commission, and Michelle Russell, the regulator's director of investigations, monitoring, and enforcement, were giving evidence to the committee.
They provided a different version of events to that given by the Kids Company figures over a complaint the commission received from an elderly widow who was concerned about the way the charity was using money she'd handed over after selling her house.
They also contradicted the charity's take on an auditor's report that, as BuzzFeed News and Newsnight revealed last week, was handed to Cabinet Office ministers just days before they signed off a £3 million grant that prolonged the life of the charity for just five working days.
When asked if Batmanghelidjh and Yentob should be recalled, committee member Paul Flynn replied: "I think we've got to." However, Bernard Jenkin, the committee chair, said: "I'm keeping it under review."
When Batmanghelidh and Yentob were before the committee on 15 October, Flynn asked about "Mrs Joan Woolard, a 78-year-old widow, [who] sold her home, so The Spectator reported, and gave the proceeds of £100,000 to the charity. After volunteering at the charity, she became disillusioned and asked for her money back." He asked: "Has it been returned?"
Yentob replied: "I could show you emails and abusive limericks sent by that lady; I could also show you the Charity Commission's review of the costings and the challenge that she made, which unequivocally say that it is untrue."
He said that the charity had proved to the Sunday Times' satisfaction that the Woolard story was "untrue".
He went on: "It is true she made a contribution. She is quite fragile and we understand and are rather sympathetic, but the abusive limericks that followed; the fact that she was saying she was not thanked when we have seen all the thank yous; the fact that this money was spent on the children and that has been authenticated, that is the kind of thing we have to put up with."
Batmanghelidjh said the charity "behaved entirely appropriately" in relation to Woolard's donation, and claimed that the Charity Commission confirmed this and "advised us not to return her money ... we followed all the instructions that the Charity Commission gave us all along, because the story that was written in The Spectator was entirely untrue."
However, when pressed on the matter at Tuesday's session, Russell told the committee: "We've found no records that we gave specific advice."
Shawcross told the committee Woolard was "a fine woman", and that the commission had "investigated the case, unfortunately it turned out she hadn't placed any limitations on the way the money was spent". He went on to describe the relationship breakdown as "a timely reminder to all trustees that actually they are accountable to their donors".
The second case related to the report by Pricewaterhouse Coopers that was produced on behalf of the charity after the commission received complaints from three former Kids Company employees.
Yentob had told the committee: "Because of the allegations going on, we had to go to PWC and pay them £50,000 to tell us that there was not much substance in the allegations and therefore the Cabinet Office should go ahead and give us the money, so we had to find another £1.7 million."
However, when Russell was asked whether the matters in the report were "trivial", she firmly replied: "No." She said that "elements" of the report – which was incomplete at the time the Cabinet Office took receipt – provided "some assurance", but it "was not a clean bill of health", and there were "concerns about the prudence" of some of the charity's spending.
The now-closed charity is currently subject to a statutory investigation by the Charity Commission. Flynn also raised particular concerns to BuzzFeed News and BBC Newsnight regarding Yentob's role at the BBC, which he thought was incompatible with his role at Kids Company.
"It's about his dual role", he said. "Of course [BBC journalists] are inhibited if you've got someone in a senior position leaning over them."
Referring to Yentob's decision to attend a Radio 4 live broadcast, Flynn added: "I'm sure he was just trying to help her [Ms Batmangeilidjh] out but the two roles are incompatible."
A spokesman for the now-closed charity said: "The Charity Commission looked into this complaint and did not uphold it. They informed Kids Company that 'we now have all the information that we need and we shall be taking no further action.' In these circumstances Kids Company made the decision not to return the donation.
"In Mr Yentob's written testimony to the PACAC [public administration committee], both before and after the hearing, he made it clear that the PWC report was incomplete but the allegations that had been investigated by PWC were not substantiated."