Richard Adam, the former group finance director of Carillion Plc, has been disqualified as a director for a period of 12 and a half years. The disqualification comes as a consequence of his conduct while serving as a director of the company between 2007 and 2016.
The disqualification undertaking was accepted by the Insolvency Service, acting on behalf of the Secretary of State for Business and Trade, following an investigation into Mr. Adam’s actions during his tenure at Carillion Plc. This development marks another significant step in the aftermath of the company’s collapse.
Zafar Khan, another former director of Carillion, also faced a disqualification undertaking earlier on 29 June 2023, highlighting the gravity of the matter and the ongoing scrutiny surrounding the directors’ conduct.
The specific details of Mr. Adam’s disqualification involve him causing Carillion Plc to rely on false and misleading financial information during the preparation of its consolidated Financial Statements for the years 2015 and 2016. Notably, the Financial Statements concealed the reality of the deterioration of major construction contracts, including the Royal Liverpool University Hospital, Battersea Power Station, Aberdeen Western Peripheral Route, Midlands Metropolitan Hospital, and Msheireb Phase 1(B).
Furthermore, Mr. Adam’s actions led Carillion to procure payments from Wipro, totaling £39.0m in 2013 and £2.0m in 2014, which were falsely reported as profits, breaching international accounting standards. In 2016, additional payments of £40.0m were similarly misrepresented, leading to a significant overstatement of profit and understatement of net debt.
Additionally, Mr. Adam concealed material information related to the major contracts and transactions from Carillion’s auditors for the accounting periods ending in 2013, 2015, and 2016, further exacerbating the severity of the financial misstatements.
As the litigation against the remaining directors is ongoing, with a trial scheduled to commence in October 2023, the Insolvency Service refrained from providing further commentary on the matter.
The disqualification of Richard Adam serves as a significant development in the pursuit of accountability for the collapse of Carillion Plc. The repercussions of the company’s demise have been far-reaching, impacting numerous stakeholders and raising questions about corporate governance and financial reporting practices.
Full details of Richard Adam’s disqualification will be available in the director disqualification register, enabling the public to access comprehensive information about the case. This ongoing investigation and its outcomes continue to be of keen interest to the business community and the public at large.