The Work and Pensions and Business, Energy and Industrial Strategy Committees publish a series of letters, following up on four hours of oral evidence in Parliament from the former directors of Carillion last week.
Former directors pressed for more detail
The former directors themselves are pressed for more detail or in depth explanations of points in their oral testimony, particularly where it appeared to contradict other evidence.
Former CEO Richard Howson ( PDF 216 KB), for example, is asked for more detail about the structural beams whose design flaws were among the many factors ascribed some responsibility for Carillion’s downfall.
Among key new questions to the former directors:
- Former CFO Zafar Khan ( PDF 215 KB) is asked to clarify again the terms of his departure, including whether a non-disclosure agreement was attached to it
- Former CE Richard Howson is asked about his dealings on the Qatar contract - singled out for particular blame for the company’s demise - and how much he was paid for his ongoing work in Qatar after he was removed as CEO
- Philip Green ( PDF 213 KB) is asked about the "surprise" deterioration in the company's cash flow shown in the September 2017 presentation that Zafar Khan stated had "spooked" the board and led to his dismissal
- Former interim CE Keith Cochrane ( PDF 66 KB) is asked about his change to the "provision", to clarify his interaction with the institutional investors who were offloading (and in at least one case, shorting) their shares in Carillion, and also about an apparent contradiction over negotiations with the main pension schemes' trustee
- Richard Adam ( PDF 67 KB) is asked to elaborate on what he thinks happened to the "healthy" company he left at the end of 2016, for it to go into compulsory liquidation a year later, and about acquisitions like Alfred McAlpine, which added £650 million "goodwill" to Carillion's books but otherwise held net liabilities of £50 million
"Everything was hunky dory until it all went suddenly and unforeseeably wrong"
The Committee has also written to the litany of organisations ascribed some role or responsibility in the events leading to the demise of Carillion by its former directors, asking them to elaborate: the Qatar contractors:
The Committees are also seeking a significant number of documents from Carillon via the Official Receiver – who were the source of the January 2018 "recovery" business plan. Among the requests are:
- The contracts review carried out ahead of the 2017 profit warning
- Former CFO Zafar Khan's presentation to the Carillion board which he told us 'spooked' the board and led to his removal.
- Full details of Carillion's attempted rights issue from June 2017, which former CEO Richard Howson detailed to the Committees.
- Carillion's final requests to the Government for financial support in January 2018
- Papers and minutes from Carillion's board and its audit, remuneration and pensions committees.
And the Committees have contacted the Federation of Small Business offering them the opportunity to respond to the dismissal by the Carillion directors of their evidence that Carillion were "notorious late payers" who "abused their dominant position" and left suppliers waiting for payment even beyond their extraordinarily long contracted payment terms.