By Kirstin Ridley
LONDON (Reuters) – The former finance boss of Carillion, a British construction services giant that imploded in 2018, has been banned from holding company directorships for 11 years in a tough censure reserved for severe breaches of duties, lawyers said.
Zafar Khan, who stepped down as Carillion’s finance director after just nine months in the job shortly before the business collapsed in January 2018, had voluntarily agreed to the disqualification, the Insolvency Service said on Monday.
The failure of Carillion, whose projects included schools, hospitals, prisons and part of a high-speed rail link, plunged thousands of jobs into uncertainty, threatened major public sector works and raised fresh questions about the risks of handing public sector projects to private companies.
Carillion employed 43,000 people before it collapsed in Britain’s biggest bankruptcy in a decade.
The Insolvency Service applied for eight directors linked to the business to be disqualified and the Financial Conduct Authority fined three former executives in 2022, including Khan, for “recklessly” publishing misleading financial statements.
The Insolvency Service said Khan caused the company to rely on false and misleading financial information, was effectively responsible for misleading market announcements about the company’s 2017 financial performance and for a 54.4 million pound ($69 million) 2016 dividend that could not be justified.
Khan did not immediately respond to a request for comment sent via LinkedIn.
Litigation is continuing against other directors and a trial has been set for Oct. 16, the Insolvency Service said.
“The length of the ban is in the top tier of director disqualification periods, reserved for only the most severe breaches of a director’s duties, and is well in excess of the national average length of disqualification (of 7 years and 4 months) for the 2022/23 period,” said Ben Drew, a lawyer at Fladgate.
($1 = 0.7881 pounds)
(Reporting by Kirstin Ridley; Editing by Mark Potter)
