The UK government has launched a legal bid to ban eight former Carillion directors from holding senior boardroom positions, almost three years on from the collapse of the outsourcing business.
The Insolvency Service, which handles corporate collapses, said it was seeking to disqualify the directors “in the public interest”, in a move that could result in them being banned from acting as UK company directors or in senior management for between two and 15 years each.
The legal action, launched by the new business secretary, Kwasi Kwarteng, comes within days of the three-year anniversary of the company’s collapse, when more than 3,000 jobs were lost and 450 public sector projects including hospitals, schools and prisons were plunged into crisis.
The court proceedings name eight individuals. The former chairman Philip Green – who was once an adviser to David Cameron on corporate responsibility – is among those listed as a defendant, alongside the former chief executives Richard Howson – who left after six years in charge in 2017, months before the company’s collapse – and Keith Cochrane, a company director since 2015 who took over in its final months before failure in January 2018.
Two former finance directors and three boardroom non-executives are also named.
The action follows the submission of a report about each director’s conduct by the official receiver – the part of the Insolvency Service charged with handling Carillion’s liquidation.
Kwarteng, who took over from Alok Sharma as business secretary this week, is understood to have determined it was right for the government to take action against the individuals for their conduct. Boris Johnson relieved Sharma as business secretary so he could work full-time on preparations for the Cop26 climate conference in Glasgow this November.
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Carillion was one of the biggest outsourcing contractors in the UK, with its work for the government spanning the construction of road and rail infrastructure to running school canteens. Its collapse with debts of £7bn was the largest corporate failure in the UK in a decade, and prompted widespread criticism of its current and former executives and auditors, as well as the government’s handling of public sector contracts with private companies.
A spokesman for the Insolvency Service said: “We can confirm that on 12 January 2020 the secretary of state issued company director disqualification proceedings in the public interest against eight directors and former directors of Carillion.”
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