Carillion Directors Boardroom Ban Should Have Come Sooner, says Unite

construction cranes

THE MOVE TO start legal steps to bar eight former directors of the collapsed construction giant, Carillion from top boardroom positions has been welcomed by Unite the union – but should have come much sooner.

The news that The Insolvency Service said it was seeking to disqualify the directors ‘in the public interest’ from acting as UK company directors comes on the eve of the third anniversary of Carillion’s collapse in 2018 with £7 billion of liabilities and the loss of thousands of jobs.

An Insolvency Service spokesperson said, “We can confirm that on 12 January 2021 the Insolvency Service, acting on behalf of Secretary of State, applied for director disqualification orders against eight directors and former directors of Carillion. The application was made in the public interest.”

The legal action has been launched by the new business secretary Kwasi Kwarteng. Former company directors with a disqualification order or disqualification undertakings are not allowed to be a director of any UK registered company or an overseas company that has connections with the UK. They are banned from being involved in the promotion, formation or management a company.

Unite assistant general secretary Gail Cartmail said: “Carillion’s collapse was not a victimless white-collar crime as thousands of workers lost their jobs. If executives and directors had reported honestly on Carillion’s financial predicament, many of those job losses could have been avoided.

“We would like to see those responsible for the Carillion debacle to be charged and appear in court. Without a doubt Carillion had been trading while insolvent for some time before its collapse.

“The events behind the Carillion collapse demonstrated everything that is wrong with corporate law in the UK; a failure to act before a company collapses and very slow investigations.

Bandit capitalism

“New business secretary Kwasi Kwarteng has injected a much-needed impetus into the Carillion affair, but needs to cast his net wider to clean up the culture of ‘bandit capitalism’ across the UK corporate environment with a strong system of regulation and enforcement.

“Only by taking much more robust action can shareholders, employees, customers and, more widely, the general public be reassured that collapses such as Carillion won’t be repeated. It was a stain on the UK’s corporate reputation.”

In its report into Carillion’s collapse, Unite provides 20 recommendations for reforms needed to prevent future corporate collapses. The report is:  Ending Bandit Capitalism: Learning the lessons following Carillion’s collapse

The Insolvency Service confirmed that on 12 January the secretary of state had issued company director disqualification proceedings in the public interest against eight directors and former directors of Carillion. This could mean they will be barred from company directorships and senior management positions for between 2 and 15 years.

Advertisement

LEAVE A REPLY

Please enter your comment!
Please enter your name here