Carillion bosses castigated over failure to 'right some of this wrong'

6 February 2018, 16:20

Former bosses at Carillion have been castigated for failing to make amends for the failure of their company – even as they apologised.

Executives of the insolvent public services and construction firm sat stony-faced as MPs accused them of making millions while ordinary workers had lost out.

MPs, in a tense four-hour meeting, heard that former chief executive Richard Howson was paid bonuses of £293,000 in 2015 and £245,000 in 2016, while former finance chief Richard Adam received £215,000 in 2015 and £140,000 in 2016.

Mr Howson said he was sorry and chairman Philip Green accepted "full and complete responsibility" for the firm's collapse, if "not necessarily culpability".

But MP Rachel Reeves accused them of using "just words", when they could give back their bonuses.

The chair of the business, energy and industrial strategy committee said: "All of you are sitting here, after multimillions of pounds of payments from the company over a number of years, and you say how sad and disappointed you are, but what actions do you take to show that?

"Because it's just words, isn't it? 'I'm saddened, I'm disappointed. I wish I could have done things differently'.

"But the money's in the bank. But it's not in the bank, is it, for the subcontractors? It's not in the bank for the people who are retired or coming up for retirement.

"So instead of the words, why don't you actually do something? Why don't you give some money back? And try and put right some of this wrong."

Earlier, Mr Green had said: "Words cannot describe the depth of my despair. I am devastated by the impact the collapse has had, on pensioners, on customers, on suppliers, on staff."

Ms Reeve was one of a number of MPs who criticised the directors.

At the time it collapsed, Carillion was struggling under nearly £900m of debt and had a reported £587m pension deficit.

It has left around 28,000 Carillion pensioners taking a 10% reduction in their payouts and, so far, more than 800 workers have lost their jobs.

Former chairman Philip Green told the four-hour hearing the firm failed because three factors coincided: the firm's large debts, problems caused by a few key contracts and an inability to secure short-term finance to get it over its difficulties.

It emerged during the hearing that one contract in particular, a construction project in Qatar, ran late and resulted in the company being owed £200m.

But, with the meeting hearing first from the company's most recent chief executive and chief finance officer, and then from their predecessors, there were times when each blamed the other.

Former chief finance officer Richard Adam said that while he took full responsibility for what happened while he was in the role, he said that when he left the firm, it had "adequate liquidity" and "wriggle room".

The chief executive before Mr Howson, Keith Cochrane, blamed the fact that he had been unable to put a "restructuring" programme in place.

"We were looking for additional short-term funding" to help the firm through to a "longer-term solution", he said.

Mr Adam's replacement, Zafar Khan, who was in his role from January to September 2017, said the poor performance in that year was in part "as a result of Brexit-related uncertainty... amplified by the general election".

He added: "I believe I did everything that I could have done, essentially."