A supervisory report on children's companies, the children's charity established by the late Camila Batmanghelidjh, is "irrational", "unfair" and "unilateral", which are key criticisms of the way charities are managed, the court ruled.

Nevertheless, despite the charity committee admitting to making a mistake and having to rewrite part of its inquiry report, which was published in 2022, the judge refused to revoke it and maintained criticism from other watchdogs made by children's companies.

Although both sides say the ruling proves their position, Justice Sheldon said another ruling on the cost: “From a substantial point of view, in my opinion, there are no winners or losers in this case in general.”

Alex Goodman KC, chief consultant to supporters of children’s companies that bring legal challenges, said: "We are very pleased and satisfied with this judgment, which provides a long-term defense for the Children's Company. This powerful decision resolves fundamental errors and restores the fairness and accuracy of the narrative."

The charity committee said the ruling was largely a testament to its investigation report, saying: “Today’s High Court decision upheld our findings of poor financial management of charities and confirmed that it was based on “full evidence”.”

Children's Company is one of the most famous charities in the UK that went bankrupt in 2015 after unfounded reports of abuse. It is praised for its groundbreaking work in London, providing practical, emotional and educational support to thousands of children who have been severely traumatized by poverty and gang violence.

Its charming founder Batmanghelidjh then endured years of political and media insults before being tremendously stripped of her achievements and paying tribute to the trustees of the charity.

The charity committee’s investigation report on the collapse of children’s companies published a year later caused a surprise in the formal discovery of the formal “bad management of charities”, triggering legal challenges for Batmanghelidjh, leading to Tuesday’s ruling.

Children's attorneys at the Children's Company, former clinical director Michael-Karim Kerman, continued his challenge on behalf of Batmanghelidjh after his death in 2024, believes the committee's report is vague and shallow, overlooking the positive findings of the previous year's High Court ruling and "continuing charity".

Sheldon ruled that the committee's criticism of children's payment management by children is equal to "Innuendo" and is "very unfair." He also concluded that separate criticisms of children’s trustees of the operation of charity were “irrational”.

"Although the Commission has discretion to include measures in the report of statutory inquiry, discretion must be exercised at the discretion. It is illegal to create such extreme injustice: in public law, it is unreasonable."

However, he upheld the committee’s conclusions on other aspects of the charity management, including the handling of client records, the number of beneficiaries that it supports it and the number of people dealing with payroll issues. He rejected the commission's allegations and booked its findings.

"I don't think the report is irrational overall," he said. "The report contains errors, or even a few unreasonable findings or observations, does not mean that the overall document is unreasonable."

Kerrman said he will continue to “fight for all those who have been stigmatized by the untrue narratives created by the media (about children’s companies) and for all the actions of various government agencies since the charity shutdown.”

"The charity has served for nearly 20 years since the traumatic shutdown of the Children's Company in August 2015 and has been working to condemn unfair charities and all condemned by charities, whether as employees, volunteers, supporters or one of thousands of vulnerable young children and families," he said.