A second former Carillion director has been banned from being a director for twelve and a half years after the Insolvency Service found that he had obscured Carillion’s financial position, which eventually caused its collapse in 2018.
Director Faces 12.5-Year Ban
Richard Adam, the group finance director of Carillion plc between 2007 and 2016, is the second director from the dissolved firm to be disqualified in recent weeks.
According to Insolvency Services, which oversees Carillion’s liquidation, he caused the company to rely on false and misleading financial information to prepare the company’s 2015 and 2016 consolidated financial statements and report the performance of major construction contracts. Some of the contracts that Carillion was involved in during this period included Royal Liverpool University Hospital, Battersea Power Station and Midlands Hospital. These statements ‘concealed the reality of the deterioration’ of the contracts from its auditors about the accounting periods ending 31 December 2013, 2015 and 2016.
Adam was also criticised for his connections to market announcements in 2016 and 2017 that were ‘misleading as to the reality of Carillion’s financial performance, position and prospects’.
The Second Carillion Director Disqualification this Month
His disqualification follows the ban of Zafar Khan, another of Carillion’s former finance chiefs, who was disqualified from serving as a company director for eleven years in early July 2023. Khan was also accused of misleading the markets about Carillion’s financial performance and position as well as sanctioning a dividend payment of £54.5m to shareholders in June 2017, which would not have been acceptable if the company’s financial statements had given an accurate picture of its financial position.
Khan resigned as Carillion’s finance director after nine months in the job shortly before it folded in 2018 and voluntarily accepted the disqualification issued by the Insolvency Service.
Carillion was put into liquidation in 2018, resulting in thousands of staff losing their jobs and leaving debts of around £7 billion, including a pension deficit of above £1 billion. The Insolvency Service is pursuing litigation against the six remaining directors, with a trial set to start the week of 16 October 2023.
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