Kwasi Kwarteng goes in for the kill: business secretary takes ‘disgraced’ Carillion executives to court
Britain’s leading credit intelligence firm ICSM Credit has welcomed the news that the Government are taking legal action against former Carillion top dogs to bar them from being directors of a UK firm again.
“It’s about time,” said Ian Carrotte, “this is something we have called for since the collapse of Carillion. You cannot boast about how brilliant your firm is one moment and then go bust leaving a trail of debt and contractors unpaid.”
Millions blown
When Carillion went down in 2018 with debts of more than £1.5bn, ICSM Credit, the trade unions, professional associations and thousands of suppliers, workers and contractors cried foul. Thousands lost their jobs and suppliers lost millions. As a leading Government contractor tasked with building hospitals, schools and more than 400 public sector projects the fall-out has been immense.
Ian Carrotte said Kwasi Kwarteng should ‘go for the jugular’ and use the legal case to send a message to ‘rogue’ directors who take cash out of firms and run away from responsibility when they collapse.
He said: “Kwasi Kwarteng is unusual in taking this action but it is needed as it is very rare for high profile directors to face Government action. And he’s making something of a purge as top brass Richard Howson and Richard Adam had left by the time it went bust. He’s also going after Keith Cochrane, chief executive at the time of the collapse and Zafar Khan, who was finance director. He’s also gunning for non-executives Philip Green, Alison Horner, Andrew Dougal and Ceri Powell which shows he’s not taking any prisoners.”
The new business secretary (he took over from Alok Sharma last year) said he had launched the legal proceedings in the public interest. After Carillion was wound up in January 2018, and the Official Receiver submitted a report about the conduct of each director which has finally led to the legal action as tax payers were left with £148m bill as well as being one of the biggest corporate failures in the UK.
The Insolvency Service said: "We can confirm that on 12 January the Secretary of State issued company director disqualification proceedings in the public interest against eight directors and former directors of Carillion."
In the dock
A joint inquiry of the House of Commons select committees for work & pensions and for business, enterprise & industrial strategy (BEIS) said: “Carillion’s business model was an unsustainable dash for cash. The mystery is not that it collapsed, but how it kept going for so long.”
The report also said that Carillion’s acquisitions lacked a coherent strategy beyond removing competitors from the market, yet failed to generate higher margins and the executives became increasingly reckless in the pursuit of growth. The added: “In doing so, it had scant regard for long-term sustainability or the impact on employees, pensioners and suppliers.The perception of Carillion as a healthy and successful company was in no small part due to its directors’ determination to increase the dividend paid each year, come what may.”
Ian Carrotte said it was time the executives faced the music and he backed the Government’s plan to take them to tcourt.
About ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.
To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com
For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk