A second former Carillion boss has been banned from being a director for more than a decade after he was found to have provided false and misleading financial information.
The Insolvency Service, which is overseeing Carillion’s liquidation, said it had accepted a disqualification undertaking from Richard Adam, the company’s chief financial officer between 2007 and 2016, for 12-and-a-half years.
follow the recent disqualification of Adam’s successor at Carillion, Zafar Khanfor 11 years.
The service said Adam caused the company to rely on “false and misleading financial information” in the preparation of its consolidated financial statements for 2015 and 2016, and in reporting on the performance of major construction contracts .
The contracts were for Royal Liverpool University Hospital, Battersea Power Station, Aberdeen Western Peripheral Route, Midlands Metropolitan Hospital and Msheireb Phase 1B in Qatar.
The Insolvency Service said the statements “concealed the reality of the deterioration” of the contracts, which turned into losses, and “the consequent serious and deteriorating financial position of Carillion”.
In relation to these large contracts, the amount of wrongdoing for 2015 was £95.4m and for 2016 it was £179.2m, according to the Insolvency Service.
In relation to the accounting periods ended 31 December 2013, 2015 and 2016, the service said Adam caused Carillion to withhold material information from its auditors about major contracts and other transactions.
Other issues highlighted included the director’s connections to market announcements in 2016 and 2017 that were “misleading as to the reality of Carillion’s financial performance, position and prospects”.
Last year, Adam was fined £318,000 by the Financial Conduct Authority for his part in the “reckless” publication of misleading accounts. But he, as well as former Khan and Carillion chief executive Richard Howson, are appealing the fines.
At the time of its collapse in 2018, the Birmingham-based company was the UK’s second largest contractor and employed 43,000 people worldwide.
The government initiated legal proceedings against eight Carillion directors and former directors in 2021. Litigation against the remaining six directors is ongoing, with a trial due to begin in October.
