{"id":487812,"date":"2023-10-13T17:42:42","date_gmt":"2023-10-13T16:42:42","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=487812"},"modified":"2023-10-14T11:40:17","modified_gmt":"2023-10-14T10:40:17","slug":"insolvency-service-drops-case-against-former-carillion-chair-and-ceo","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/contractors\/carillion\/insolvency-service-drops-case-against-former-carillion-chair-and-ceo-13-10-2023\/","title":{"rendered":"Insolvency Service drops case against former Carillion chair and CEO"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The Insolvency Service has dropped court action against Carillion\u2019s former chair and interim chief executive at the 11th hour.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The defunct contractor\u2019s chair, Philip Green, and Keith Cochrane, who was interim chief executive between July 2017 until the firm\u2019s collapse in January 2018, were among five former non-executive directors who had been due in London\u2019s High Court on Monday morning (16 October).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But on Friday (13 October), the Insolvency Service told <\/span><i><span style=\"font-weight: 400;\">Construction News<\/span><\/i><span style=\"font-weight: 400;\"> that it had abandoned the disqualification proceedings against the five, brought under section six of the Companies Directors Disqualification Act 1986.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">An Insolvency Service spokesperson said \u201cthe secretary of state is obliged to keep the public interest in all cases under constant review, and it was concluded that continuing with the proceedings against the non-executive directors was no longer in the public interest\u201d.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cOn that basis, the parties agreed that the proceedings should be concluded by way of agreement and without the need for a trial or the associated expense,\u201d they added. \u201cThis concludes the proceedings.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Along with Green and Cochrane, the others who have been reprieved are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">former audit committee chair Andrew Dougal;<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">former remuneration committee chair Alison Horner; and<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">ex-sustainability committee chair Ceri Powell, who also sat on other committees, including Carillion\u2019s audit and remuneration committees.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Former chief executive <\/span><a href=\"https:\/\/www.constructionnews.co.uk\/sections\/contractors\/carillion\/former-carillion-boss-handed-director-ban-05-10-2023\/\"><span style=\"font-weight: 400;\">Richard Howson<\/span><\/a><span style=\"font-weight: 400;\">, and finance directors <\/span><a href=\"https:\/\/www.constructionnews.co.uk\/sections\/contractors\/carillion\/second-carillion-boss-handed-long-term-director-ban-17-07-2023\/\"><span style=\"font-weight: 400;\">Richard Adam<\/span><\/a><span style=\"font-weight: 400;\"> and <\/span><a href=\"https:\/\/www.constructionnews.co.uk\/sections\/contractors\/carillion\/former-carillion-boss-banned-from-being-a-director-for-11-years-03-07-2023\/\"><span style=\"font-weight: 400;\">Zafar Khan<\/span><\/a><span style=\"font-weight: 400;\"> had already accepted disqualifications of eight, 12.5 and 11 years respectively.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Insolvency Service found a variety of breaches by them, including making misleading statements about the contractor\u2019s financial performance.<br \/>\n<\/span><\/p>\n<p>Five barristers from Five Erskine Chambers comprised two of the four defence teams in the case.<\/p>\n<p>In a statement, Five Erskine Chambers said that the Insolvency Service\u2019s decision to drop the case represented a \u201cmajor triumph\u201d, and that the case against its clients was \u201clegally flawed, based primarily on an erroneous contention that directors owe a strict duty to know the true financial position of the company\u201d.<\/p>\n<p><span style=\"font-weight: 400;\">Carillion, the UK\u2019s second-largest contractor in 2017, became Britain\u2019s largest ever corporate failure in 2018, collapsing with \u00a37bn worth of liabilities.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Accountancy firm KPMG<\/span><a href=\"https:\/\/www.constructionnews.co.uk\/financial\/kpmg-hit-with-21m-fine-over-faulty-carillion-audit-12-10-2023\/\"> <span style=\"font-weight: 400;\">was fined \u00a321m this week<\/span><\/a><span style=\"font-weight: 400;\"> for failures of the firm\u2019s audits.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In <\/span><a href=\"https:\/\/publications.parliament.uk\/pa\/cm201719\/cmselect\/cmworpen\/769\/769.pdf\"><span style=\"font-weight: 400;\">2018<\/span><\/a><span style=\"font-weight: 400;\">, a parliamentary report into the company\u2019s collapse said: \u201cNon-executives are there to scrutinise executive management. They have a particularly vital role in challenging risk management and strategy, and should act as a bulwark against reckless executives.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cCarillion\u2019s NEDs were, however, unable to provide any remotely convincing evidence of their effective impact.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The report was written following a joint investigation by two select committees: the work and pensions committee and the business, energy and industrial strategy committee.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><i>This story has been amended to make it clear that the Insolvency Service discontinued the proceedings on the sole basis that to continue the proceedings was not in the public interest. The only agreement between the parties related to costs.<\/i><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Insolvency Service has dropped court action against Carillion\u2019s former chair and interim chief executive at the 11th hour.\u00a0 The defunct contractor\u2019s chair, Philip Green, and Keith Cochrane, who was interim chief executive between July 2017 until the firm\u2019s collapse in January 2018, were among five former non-executive directors who had been due in London\u2019s &#8230;<\/p>\n","protected":false},"author":43915,"featured_media":373320,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[531,578],"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=\"The Insolvency Service has dropped court action against Carillion\u2019s former 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