Watchdog to probe Carillion finance chiefs as more jobs go
BRITAIN’S ACCOUNTANCY watchdog has started an investigation into the handling of financial statements by two former finance directors at collapsed construction giant Carillion.
The Financial Reporting Council (FRC) will probe former group finance directors Richard Adam and Zafar Khan over statements made between 2014 and 2017.
The inquiry will cover the years ending December 31 2014, 2015 and 2016, the six-month period to June 30, 2017, and the preparation and reporting of other financial information between 2014-2017.
The FRC announced a separate investigation earlier this year into how accountancy giant KPMG audited the accounts of Carillion, which plunged into liquidation in January.
It yesterday emerged that more workers at the firm are to be made redundant, taking the total to almost 1,600.
The Official Receiver announced a further 46 employees will leave the business in the coming days.
The firm’s demise left in its wake a £900m debt pile, a £590m pension deficit and hundreds of millions of pounds in unfinished public contracts.
City banks, law firms and accountancy firms have been sharply rebuked by MPs over Carillion’s fall, with former bosses coming under fire for the pay awards they received as the company struggled. An influential group of MPs claimed in February that Mr Adam “dumped” his last shares in Carillion – worth hundreds of thousands of pounds – at the first possible moment.
Mr Adam retired at the end of December 2016. On March 1, 2017 he sold his entire existing shareholding for £534,000, including performance awards for 20132015 of £277,000 which vested on his retirement.
He then sold his long-term incentive plan awards for 2014 on May 8, 2017, the day they vested, for £242,000.
In total, in March and May 2017 he sold shares worth £776,000, the Work and Pensions and Business Select Committees revealed last month.
Mr Khan’s contract was terminated last September after eight months in the job, having “spooked” Carillion’s board with a financial update a few days earlier that showed there had been a further decline in the company’s position since the “shock” £845m contract write-down in July 2017, said the committees.
But the Government is aiming to give new powers to staff and suppliers affected by large-scale insolvencies such as that affecting Carillion.
A consultation is being launched over planned action against “irresponsible” company directors, announced Business Secretary Greg Clark today.
One of the proposals is to claw back money for workers by reversing asset stripping.