{"id":487348,"date":"2023-10-05T12:36:28","date_gmt":"2023-10-05T11:36:28","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=487348"},"modified":"2023-10-05T17:22:39","modified_gmt":"2023-10-05T16:22:39","slug":"former-carillion-boss-handed-director-ban","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/contractors\/carillion\/former-carillion-boss-handed-director-ban-05-10-2023\/","title":{"rendered":"Former Carillion boss handed director ban"},"content":{"rendered":"<div class=\"govuk-grid-row\">\n<div class=\"govuk-grid-column-two-thirds\">\n<p class=\"gem-c-lead-paragraph\">Former Carillion chief executive Richard Howson has been banned from being a director for eight years.<\/p>\n<p>Howson served as chief executive of the contractor &#8211; the second-biggest in the UK before it collapsed in 2018 &#8211; between December 2011 and July 2017.<\/p>\n<p>The Insolvency Service, which is overseeing the liquidation of Carillion, announced yesterday (4 October) that Howson had accepted a disqualification for his conduct during his time in charge of Carillion.<\/p>\n<p>Incidents listed by the Insolvency Service included:<\/p>\n<ul>\n<li>Howson (pictured) caused Carillion to report, in its annual accounts for 2015 and 2016, the performance of its major construction contracts &#8220;in a way which he ought to have known falsified and concealed the reality of the deterioration of major contracts which in fact became loss-making&#8221;, the Insolvency Service said in a statement. This also hid &#8220;Carillion\u2019s consequent grave and deteriorating financial position&#8221;, it added. The contracts were for Royal Liverpool University Hospital, Battersea Power Station, Aberdeen Western Peripheral Route and Midlands Metropolitan Hospital in the UK, and Msheireb Phase 1(B) in Qatar. The misstatement for 2015 regarding the major contracts was \u00a395.4m &#8220;with the result that profits should have been \u00a365.3m rather than the \u00a3155.1m reported&#8221;, the Insolvency Service stated, adding that net current assets should have been \u00a357m rather than the \u00a341.5m reported. The misstatement for major contracts in 2016 was \u00a3179.2m, and Carillion should have reported a loss of \u00a361.7m rather than the \u00a3146.7m actually announced. Net current assets should have been \u00a3232.5m rather than the \u00a352.4m actually reported.<\/li>\n<\/ul>\n<\/div>\n<ul>\n<li>Howson also caused the firm to breach international accounting standards by reporting payments made to IT consultancy Wipro totalling \u00a339m in 2013, \u00a32m in 2014 and \u00a340m in 2016 as profits when they should have been reported as losses, according to the Insolvency Service. It said: \u201cMr Howson ought to have known of the false accounting, of the profit overstatement and of the net debt understatement and of the concealment from the auditors of the true picture regarding Carillion\u2019s obligation to make repayments to Wipro.\u201d<\/li>\n<li>In addition, Howson caused the firm to make market announcements in December 2016, March 2017 and May 2017 &#8220;which he ought to have known were misleading as to the reality of Carillion\u2019s financial performance, position and prospects&#8221;, the Insolvency Service said.<\/li>\n<li>Howson also caused the firm to make a 2016 final dividend payment of \u00a354.4m, paid in June 2017, which &#8220;payment he ought to have known, could not be justified by reference to the FY2016 financial statements&#8221; due to the misleading picture they presented. &#8220;Mr Howson ought to have known that the 2016 final dividend payment was not in the interests of PLC, its members or its creditors and was not one that PLC could reasonably afford to make in view of its true financial performance,&#8221; the Insolvency Service said.<\/li>\n<\/ul>\n<\/div>\n<div class=\"govuk-grid-row\">\n<p>The government<a href=\"https:\/\/www.constructionnews.co.uk\/contractors\/carillion\/eight-carillion-directors-face-legal-bans-14-01-2021\/\">\u00a0began legal proceedings<\/a> against eight directors and former directors of Carillion in 2021.<\/p>\n<p>&#8220;As the litigation against the remaining directors is ongoing, with a trial set to commence the week of 16 October 2023, we are unable to comment any further,&#8221; an Insolvency Service spokesperson said.<\/p>\n<p>Howson&#8217;s disqualification follows the recent bans for <a href=\"https:\/\/www.constructionnews.co.uk\/sections\/contractors\/carillion\/second-carillion-boss-handed-long-term-director-ban-17-07-2023\/\">former finance director Richard Adam<\/a> and <a href=\"https:\/\/www.constructionnews.co.uk\/sections\/contractors\/carillion\/former-carillion-boss-banned-from-being-a-director-for-11-years-03-07-2023\/\" target=\"_blank\" rel=\"noopener\">his successor Zafar Khan.<\/a><\/p>\n<p><a href=\"https:\/\/www.constructionnews.co.uk\/contractors\/carillion\/former-carillion-bosses-facing-870000-fines-over-misleadingly-positive-accounts-28-07-2022\/\" target=\"_blank\" rel=\"noopener\">Last year<\/a> the three former Carillion directors were also fined nearly \u00a3900,000 by the Financial Conduct Authority for \u201crecklessly\u201d publishing misleading accounts \u2013 although all three directors appealed the fines, with the appeals yet to be heard in a tribunal.<\/p>\n<p>Three of Carillion\u2019s financial statements \u2013 published on 7 December 2016, 1 March 2017 and 3 May 2017 \u2013 were \u201cmisleading and did not accurately or fully disclose the true financial performance of Carillion\u201d, the Financial Conduct Authority said at the time.<\/p>\n<p>Separately, the Financial Reporting Council has yet to conclude an investigation into KPMG&#8217;s audits of Carillion&#8217;s financial accounts, which it launched five and a half years ago.<\/p>\n<p><a href=\"https:\/\/www.constructionnews.co.uk\/contractors\/carillion\/kpmg-settles-1-3bn-lawsuit-with-carillions-liquidator-20-02-2023\/\" target=\"_blank\" rel=\"noopener\">In February<\/a>, KPMG settled a \u00a31.3bn lawsuit with the Insolvency Service, which had alleged that the accounting giant&#8217;s pre-collapse audit of Carillion was negligent. KPMG had previously described the allegations as \u201cwithout merit\u201d.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Former Carillion chief executive Richard Howson has been banned from being a director for eight years. Howson served as chief executive of the contractor &#8211; the second-biggest in the UK before it collapsed in 2018 &#8211; between December 2011 and July 2017. The Insolvency Service, which is overseeing the liquidation of Carillion, announced yesterday (4 &#8230;<\/p>\n","protected":false},"author":139598,"featured_media":373322,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[531,2164],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v18.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<meta name=\"description\" content=\"Former Carillion chief executive Richard Howson has been banned from being a director for eight years.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.constructionnews.co.uk\/contractors\/carillion\/former-carillion-boss-handed-director-ban-05-10-2023\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta 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