CRIMINAL CAPITALI$M
Ex-Carillion finance chief given 11-year company director ban


Rob Davies
Mon, 3 July 2023 

Photograph: Simon Dawson/Reuters

The former finance director of the collapsed outsourcing company Carillion has been banned from serving as a company director for 11 years over his role in the company dishing out dividends of more than £50m while misstating its financial position by more than £200m.

The outsourcer’s implosion in 2018 was one of the most high-profile failures in British corporate history, costing 3,000 jobs and plunging 450 public sector projects, including hospitals, schools and prisons, into chaos.

The Insolvency Service, which was responsible for managing Carillion’s collapse, has since been pursuing action against former directors of the company, including its former chief financial officer Zafar Khan.


On Monday, more than five years after the company’s collapse, the Insolvency Service said Khan had been disqualified from acting as a director for 11 years, citing his conduct as Carillion misled the markets about its parlous financial position.

The agency, an arm of the Department for Business and Trade, said Khan had caused Carillion to rely on “false and misleading financial information” during the preparation of its financial statements for 2016.

This meant that the accounts “did not give a true and fair view” of the company’s financial health, misstating the value of key construction contracts, including Battersea power station, Royal Liverpool University hospital, and the Midlands Metropolitan hospital.

The two state-of-the-art hospitals were subject to significant delays, setting back plans to improve the availability of medical care in two of Britain’s biggest cities, Liverpool and Birmingham.

The Insolvency Service said this led Carillion to declare a pre-tax profit of £146.7m when it had actually lost £61.7m, a misstatement of £208.5m.

Khan was also responsible for Carillion misleading the markets in two statements made during March and May 2017, the Insolvency Service said, giving a false impression of the company’s “performance, position and prospects”.

He also caused Carillion to make a dividend payment of £54.5m to shareholders in June 2017, which could not have been justified if the company’s financial statements had given an accurate picture of its position.

This was “not in the interests of [Carillion], its members or its creditors and was not one that [Carillion] could reasonably afford to make in view of its true financial performance”, the Insolvency Service said.

The agency is still pursuing legal action against remaining directors of Carillion, with a civil trial expected to begin in October.

When proceedings were launched in January 2021, the Insolvency Service named eight people, including Khan, Carillion’s former chair Philip Green – who was once an adviser to David Cameron on corporate responsibility – its former chief executive Richard Howson and Keith Cochrane, a company director since 2015 who replaced Howson as CEO in the final months before the company failed in January 2018. Khan’s predecessor Richard Adam was also named.

Khan’s disqualification means he cannot serve as a director of a company in England, Wales or Scotland, or get other people to manage a company under his instructions. He can be prosecuted if he breaches the terms of his undertaking not to do so.

The Guardian has approached a former representative of Khan for comment.