The Insolvency Service has withdrawn legal action against Carillion’s former chairman and acting chief executive at the 11th hour after agreeing confidential settlements with them.
The defunct contractor’s chairman Philip Green and Keith Cochrane, who was interim chief executive from July 2017 until the company collapsed in January 2018, were among five former non-executive directors to present at the High Court in London on Monday morning (October 16). ).
But on Friday (October 13), the Insolvency Service said Construction news that he had abandoned the disqualification proceedings against the five, initiated under section six of the Companies Directors Disqualification Act 1986.
A spokesman for the Insolvency Service said: “The Secretary of State is required to keep the public interest in all cases under constant review, and it was concluded that it was no longer in the interest to proceed with the proceedings against the non-executive directors audience”.
“Based on this, the parties agreed that the proceedings should be concluded by agreement and without the need for a trial or associated costs,” they added. “This concludes the proceedings.”
The spokesman declined to elaborate on what the agreements were.
Along with Green and Cochrane, the others who have been compensated are:
- former audit committee chair Andrew Dougal;
- former remuneration committee chair Alison Horner; i
- Former sustainability committee chair Ceri Powell, who also sat on other committees, including Carillion’s audit and remuneration committees.
Former CEO Richard Howsonand financial directors Richard Adam i Zafar Khan he had already accepted disqualifications of eight, 12.5 and 11 years respectively.
The Insolvency Service found a variety of breaches by them, including making misleading statements about the contractor’s financial performance.
Five lawyers from Five Erskine Chambers were two of the four defense teams in the case.
In a statement, Five Erskine Chambers said the Insolvency Service’s decision to drop the case represented a “huge triumph” and that the case against its clients was “legally flawed, based primarily on an erroneous claim that the directors have a strict duty to know.” the true financial situation of the company”.
Carillion, the UK’s second largest contractor in 2017, became the UK’s biggest corporate failure in 2018, collapsing with liabilities worth £7 billion.
Accounting firm KPMG was fined £21m this week for failures of the company’s audits.
In 2018a parliamentary report into the company’s collapse said: “Non-executives are there to check executive management. They have a particularly vital role in challenging risk management and strategy, and should ‘act as a bulwark against imprudent executives.
“Carillion’s NEDs, however, were unable to provide any remotely convincing evidence of its effective impact.”
The report was drawn up following a joint investigation by two select committees: the work and pensions committee and the business, energy and industrial strategy committee.
