7 Carillion The blame game
Overview This chapter provides an overview of who was to blame for the collapse of Carillion. The financial directors
According to the Select Committee, the verdict was clear: Carillion’s directors took huge salaries and bonuses which, for all their professed contrition in evidence before us, they show no sign of relinquishing. (SC page 68) We consider the role of all the directors and the non-executive directors in Appendix 2.07.01. This appendix contains more detailed information on this chapter than can be fitted in here. (See http://www.fin-rep.org/ wp-content/uploads/book2/Appendix-2.07.01-Carillion-The-BlameGame.pdf). By and large only Emma Mercer, the last financial director appointed after the crisis broke, had any real understanding of the financial plight Carillion was in. In general, all three of us viewed the performance of the financial directors, Emma Mercer apart, as inadequate or worse. In the Select Committee hearings, Mercer suggested that her predecessor, Zafar Khan, finance director for nine months until September 2017, and former chief executive Richard Howson had been “aggressive” in how they had accounted for key contracts. That claim was denied by Khan, who denied being “asleep at the wheel” and he expressed his surprise over the firm’s liquidation. He did say that the company’s last dividend should not have been paid, but he said that the matter had been discussed by the board and signed off in June 2017, just weeks before the first profit warning. He also stated that “I had no issues with record keeping”, and that most of the risks that hit the company in 2017 had been
