A former finance chief of the collapsed construction firm Carillion has been disqualified from being a director for over a decade for providing misleading information regarding the company’s financial performance and position.
Zafar Khan was Carillion’s finance chief for eight months before the firm went bust in 2018.
The Insolvency Service said Khan made Carillion “rely on false and misleading financial information” when preparing the company’s accounts. This “resulted in the material misstatement of profits in relation to the performance of five major construction contracts”.
The agency said the misstatement was at least more than £200m, together with an adjusted year-end loss of at least over £60m, in contrast to Carillion’s reported profit before tax of £146.7m.
At the time of its collapse, Carillion held approximately 450 construction and service contracts in the public sector and employed more than 43,000 people, including 18,000 in the UK.
The Insolvency Service, which is part of the Department for Business and Trade that was responsible for managing Carillion when it went into administration, is pursuing action against former directors of the company.
Ongoing litigation
Khan’s is the first ban against any former Carillion executive imposed under the Company Directors Disqualification Act.
Eight former Carillion directors, including former chief executive Richard Howson, also face bans following the launch of legal proceedings by former business secretary Kwasi Kwarteng in January 2021.
Last year, Khan, Howson and Richard Adam, who also served as Carillion’s finance director, were fined a total of almost £1m for providing misleading statements to investors about the state of the company’s finances.
All of them were reported to be appealing against the fines imposed by the Financial Conduct Authority.
An Insolvency Service spokesperson said: “As the litigation against the remaining directors is ongoing, with a trial set to commence the week of 16 October 2023, the Insolvency Service is unable to comment any further.”
