Government seeks disqualification orders for Carillion bosses
Directors of collapsed construction and outsourcing firm targeted in Insolvency Service s High Court move
PA
19 Jan 2021
Three years after the collapse of construction and outsourcing giant Carillion, the Insolvency Service has applied to the High Court seeking orders disqualifying eight directors and former directors of the firm from holding such posts in future.
Carillion held approximately 450 contracts with government when it went bust, with clients including the Department for Transport, the Department for Education, the Department of Health and Social Care, the Ministry of Justice, and the Ministry of Defence.
The Insolvency Service said the bid to secure orders that could see the eight bosses barred from senior management roles for up to 15 years had followed an investigation by the Official Receiver and was made on behalf of the secretary of state for business, energy and industrial strategy.
It was a dramatic end for government super-contractor Carillion when it crashed into insolvent liquidation in January 2018. Part-completed road projects, unfinished hospital buildings and disruption to hospital cleaning and catering heralded the end of this self-styled “integrated support services business”.
Carillion owed its creditors over £1.5 billion, and when matters came to a head on the back of asset write-downs and a plummeting share price, the government refused to mount a rescue. In the end over 3,000 employees lost their jobs and many supplier firms lost contracts, with domino insolvencies spreading from the rotten core of Carillion.
Now comes the possibility of a regulatory reckoning, at least for eight directors of the public limited company. The government’s Insolvency Service has announced that it is bringing directors’ disqualification proceedings against these former directors for their alleged role in running the construction and infrastructure contractor
ON Monday January 15, 2018, the construction and outsourcing conglomerate Carillion went bust. So the third anniversary has just arrived.
Steve Paul remembers clearly how he found out about the Carillion collapse. At the time he was running his plastering and flooring business in the West Midlands. His company, SDP Floorscreeds Ltd, had big contracts with Carillion for building floors on the £300m Midland Metropolitan Hospital project in Birmingham.
Paul got a call from one of his supervisors on the Metropolitan project at eight in the morning. “He told me the gates were locked and the men couldn’t get on site. Everything was padlocked. There were security guards. All our materials and plant for the floors were locked inside the gates.”
New Business Secretary Kwasi Kwarteng has launched legal action against eight former Carillion directors three years after the construction firm collapsed.
Carillion went bust in January 2018 after racking up heavy debts while working on largescale public projects. Those facing legal action are the former chairman, two chief executives, two finance directors and three non-executives.
If the action is successful it could see them banned from managing businesses between two and 15 years.
New Business Secretary Kwasi Kwarteng has launched legal action against eight former Carillion directors three years after the construction firm collapsed
The most high-profile names listed in court documents are Philip Green – Carillion chairman from May 2014 until its liquidation – and Richard Howson, chief executive from 2011 to 2017. Keith Cochrane, a company director who took over from Howson, was also named.