Another Carillion director banned for over a decade

A second Carillion ex-finance chief has been banned from being a director for his role in obscuring the contractor’s financial position that eventually led to its collapse in 2018.

The Insolvency Service has disqualified Richard Adam for 12-and-a-half years for relying “on false and misleading financial information" for the preparation of the company’s 2015 and 2016 consolidated financial statements.

The accounts that Adam misrepresented “concealed the reality of the deterioration of the major contracts which in fact became loss-making and Carillion’s consequent grave and deteriorating financial position”.

Some of the major contracts Carillion was involved in during that period include Battersea Power Station, Royal Liverpool University Hospital and Midlands Metropolitan Hospital.

The government agency also said that Adam was implicated in procuring payments from multinational technology company Wipro which were inaccurately reported and accounted for.

Richard Adam was Carillion’s group finance director between 2007 and 2016. His disqualification period is less than three years short of the maximum penalty of 15 years, reserved for the most serious cases, such as fraud.

Earlier in July, another of Carillion’s former finance chiefs, Zafar Khan, was disqualified from being a director for 11 years for providing misleading information regarding the company’s financial performance and position.

Khan was Carillion’s finance chief from January to September 2017. The Insolvency Service said Khan made Carillion “rely on false and misleading financial information” when preparing its accounts. This “resulted in the material misstatement of profits in relation to the performance of five major construction contracts”.

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.