Kids Company's Camila Batmanghelidjh denies claims of sex abuse at the charity
Kids Company founder Camila Batmanghelidj has defended her role in the collapsed charity amid allegations of sexual abuse, violence and drug taking involving young people in its care.
She also rejected claims of financial mismanagement at the charity, which was forced to close its doors this week after funding ran out.
But she accepted it was "irresponsible" not to have reserves at the charity to make up for any shortfall in donations.
An investigation by BBC2's Newsnight and BuzzFeed News heard allegations that staff knew of complaints from girls, then aged 16 to 18, that male clients of Kids Company in their 20s had been forcing them to have sex and commit sexual acts.
Two witnesses alleged that complaints had been made known to relevant members of staff at the Urban Academy in Southwark.
But Ms Batmanghelidjh told Newsnight: "This allegation has been brought to us for the first time by the police recently."
She said: "I draw the line at sexual abuse. It's one thing kids losing it because they are having a tantrum or they are having a distressing day and they hurl chairs and we deal with all that sort of stuff.
"But sexual abuse is very serious and if it was brought to our attention we would have absolutely dealt with it very robustly."
The allegations of sexual abuse were blamed by the charity for the loss of a donation which could have helped secure its future and Ms Batmanghelidjh said it had been "very irresponsible" to release the information.
She said: "We had a fantastic deal on the table, with the Government putting money in, with the philanthropists putting money in.
"The minute the Government money hit our account, suddenly out of the blue came these allegations of sexual abuse about which we knew nothing and within an hour or so it was all over the news and we still didn't know what these allegations were at that point.
"Consequently what happened is a charity that is responsible for the welfare and protection of children overnight turned into a charity that was sexually exploiting children, on the back of absolute rumours. Nothing had been brought to our attention.
"You will see that after this police investigation it will become clear that we did not withhold any information."
Ms Batmanghelidjh also denied an allegation that she had advised a staff member not to press charges after he was attacked by a young client with a snooker ball at The Arches II centre in south London. The perpetrator is currently serving a prison sentence for murder.
The Kids Company founder said: "I do remember hearing about that incident. It wasn't that I ever said 'you shouldn't press charges', I never would say that. Our policy is if staff wish to press charges they can do that.
"But we work with very disturbed kids, they hurl chairs, they hurl snooker balls."
She also denied allegations that skunk - the strong form of marijuana - was openly smoked by staff and clients at the Urban Academy.
"Young people are absolutely not allowed to smoke any drugs or use any type of drugs on our premises," she said.
Asked if it was "irresponsible" for the charity to have operated without cash reserves, leaving it financially vulnerable, Ms Batmanghelidjh said: "I completely agree with you. That is precisely why we went to central government to try to get a more robust grant."
Explaining the financial problems she said: "The difficulty Kids Company had is that children and young people are self-referring off the street and we are getting too many with too serious levels of problems.
"So we are getting psychotic kids, we are getting children and young people who are sexually and physically abused, that local authorities aren't taking.
"So, consequently, what's happened is when these children come to the premises, nobody pays for them."
The charity's chairman of trustees Alan Yentob defended the way it was run, saying it was "complete rubbish" to claim there was serious financial mismanagement..
Mr Yentob, a senior BBC executive, told Channel 4 News: "The idea of what I have heard some journalists call 'appalling financial mismanagement' is complete rubbish.
"We have been audited by the government every year since Tony Blair and the Labour government started to give us money."
Labour has called for the National Audit Office to investigate the flow of taxpayer money to Kids Company, but Mr Yentob said the state support was "significantly less than that given by private donors".
The Government was forced to hold crisis talks to draw up emergency plans to provide support for children following the sudden closure of the charity, which operated in London, Bristol and Liverpool.
Up to 36,000 vulnerable children and young people received help from Kids Company, and there are fears many could slip through the net unless immediate plans are put in place to continue services.
A Government spokesman said: "We are now working closely with charities, social enterprises and other relevant organisations including London Youth on a range of immediate measures to signpost young people to other services in the local areas.
"Local authorities will also be reviewing the most high-risk cases on an individual basis to determine what support is required."