News story

Former director of Carillion banned for 11 years

Zafar Khan, who served as Carillion's finance director, has been disqualified as a director for 11 years.

From:
The Insolvency Service
Published
3 July 2023

An Insolvency Service spokesperson said:

“The Insolvency Service, acting on behalf of the Secretary of State for Business and Trade, has accepted a disqualification undertaking from Zafar Iqbal Khan for 11 years for his conduct as a director of Carillion Plc (“PLC”).

“As the litigation against the remaining directors is ongoing, with a trial set to commence the week of 16 October 2023, the Insolvency Service is unable to comment any further.”

Background information:

  • Further details can be found in the director disqualification register.

  1. Mr Khan caused PLC to rely on false and misleading financial information for the preparation of consolidated Financial Statements for 2016 which Financial Statements did not give a true and fair view within the meaning of section 393 of the Companies Act 2006 and did not comply with International Accounting Standard (IAS) 11, IAS 18, IAS 32, IAS 38 and the IFRS Framework for Financial Reporting, and resulted in the material misstatement of profits in relation to the performance of five major construction contracts (namely, Royal Liverpool University Hospital; Battersea Power Station; Aberdeen Western Peripheral Route; Midlands Metropolitan Hospital; and Msheireb Phase 1(B)) and transactions entered into with a third party, Wipro. The quantum of the misstatement is assessed as at least £208.5m, together with an adjusted year end loss of, at least, £(61.7m) in contrast to PLC’s reported profit before tax of £146.7m.

  2. Mr Khan caused PLC to make Market Announcements on 01 March 2017 and 03 May 2017 which were misleading as to the reality of Carillion’s financial performance, position and prospects, and were in breach of Listing Rule 1.3.3R and Article 15 of the Market Abuse Regulation.

  3. Mr Khan caused PLC to make the 2016 final dividend payment of £54.4m, which was paid on 09 June 2017, which payment could not be justified by reference to the FY2016 Financial Statements because those Financial Statements did not give a true and fair view. Furthermore, the 2016 final dividend payment was not in the interests of PLC, its members or its creditors and was not one that PLC could reasonably afford to make in view of its true financial performance.

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Published 3 July 2023