Carillion bosses face 15-year ban from managing companies if new secretary of business Kwasi Kwarteng makes bold move
- Carillion went bankrupt in January 2018 after incurring heavy debt
- Those dealing with legal action include the former chairman and two chief executives
- In the case, they could be banned from managing businesses for between 2 and 15 years
Three years after the collapse of the construction company, New Business Secretary Kwasi Kwarteng started legal action against eight former executives of Carillion.
Carillion went bankrupt in January 2018 after incurring heavy debt while working on large-scale public projects. Those facing legal action include the former chairman, two chief executives, two finance directors, and three non-executives.
If the campaign is successful, they may not be able to manage companies for between two and fifteen years.
New Business Secretary Kwasi Kwarteng Takes Legal Action Against Eight Former Carillion Directors Three Years After Construction Company Crashed
The most high-profile names mentioned in court documents are Philip Green – Carillion chairman from May 2014 until its liquidation – and Richard Howson, CEO from 2011 to 2017. Keith Cochrane, a company director who took over from Howson, was also mentioned .
The Insolvency Office said, “We can confirm that the Secretary of State has issued a corporate director disqualification proceeding against eight directors and former directors of Carillion in the public interest.”
The move comes after criticism this week about the lack of action against Carillion. In November, the Financial Conduct Authority (FCA) found executives “acting recklessly” and publishing “deceptively positive” updates in the year before it collapsed.
According to the watchdog probe, the directors were aware of the deterioration, but failed to notify the market or their own board and audit committee. Carillion’s drivers were not named by the FCA, but were given warnings.
Kwasi Kwarteng was appointed Business Secretary last week
Thousands of jobs were lost following the company’s collapse, one of the largest ever bankruptcies in the UK. Carillion was one of several private companies operating public services in the UK, but it had fought for survival after contract delays and a downturn led to profit warnings.
It also comes just a day after Kwarteng announced proposals for a shake-up from audit firms. They have come into the spotlight for failing to raise the red flags ahead of a litany of corporate failures like cafe chain Patisserie Valerie and Carillion.
The legal action marks a bold move by Kwarteng, who was appointed company secretary last week with predecessor Alok Sharma now focusing full-time on his role as president of the UN COP26 global climate talks in Glasgow later this year.
Trained by Eton and Cambridge, Kwarteng, 45, was first elected in 2010 and is one of the authors of a controversial 2012 pamphlet Britannia Unchained, calling the Britons ‘one of the worst idlers in the world’.