Former Carillion chief exec hit with 8-year boardroom ban

Richard Howson was responsible for company accounts that "falsified and concealed the reality of the deterioration" of major contracts, Insolvency Service says
Photo: Mark Richardson/Alamy Stock Photo

The former chief executive of the collapsed construction and outsourcing giant Carillion has been banned from being a company director for eight years.

The Insolvency Service said Richard Howson, who was chief exec for five and a half years until July 2017, has been disqualified as a result of his conduct as a director of Carillion Plc, which collapsed in January 2018.

When Carillion went into liquidation, it was £900m in debt and held several government contracts for work on the High Speed 2 rail link; providing school meals; and maintaining public sites including military bases and prisons.

It sparked a mammoth cross-government response to ensure services and construction projects that the firm ran did not grind to a halt, and sparked longer-term outsourcing reforms.

In its announcement, the Insolvency Service said Howson had caused the company to report on the performance of Carillion’s major construction contracts “in a way which he ought to have known falsified and concealed the reality of the deterioration of the major contracts which in fact became loss-making, and Carillion’s consequent grave and deteriorating financial position”.

Its contracts at the time included Royal Liverpool University Hospital, Battersea Power Station and Midlands Metropolitan Hospital.

Howson also enabled Carillion to procure payments from technology consultancy Wipro in 2013, 2014 and 2016, which were wrongly reported and accounted for as profits. This meant the company’s profit was overstated by £39m and its net debt understated by £41m.

“Mr 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’s obligation to make repayments to Wipro,” the Insolvency Service said.

His other failings included causing the company to make “misleading” market announcements about the reality of the company’s financial performance and prospects; and making a final dividend payment in 2016 of £54.4m that “could not be justified” and was not in the interests of the company, its creditors or members.

Howson joins two other former Carillion execs, finance director Zafar Khan and group finance director Richard Adam, who were landed with 11 and 12-and-a-half-year bans respectively in July.

Litigation against other directors is ongoing, with a trial due to start the week of 16 October 2023.

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