The former finance director of collapsed construction firm Carillion “dumped” the last of his shares at the earliest possible moment, MPs say.
Richard Adam sold shares worth hundreds of thousands of pounds in early 2017 as soon as he qualified for them after leaving Carillion in December 2016. The information was released by a joint committee of MPs looking into Carillion’s collapse. Mr Adam said he had sold them “when I was invited to do so by the company”. The information was published by the Work and Pensions and Business Select Committees, which are conducting a joint inquiry into Carillion’s collapse. More than 1,000 Carillion workers have lost their jobs since the firm went into liquidation last month. Mr Adam retired at the end of December 2016. On 1 March 2017, he sold all the shares he had at the time for £534,000, including performance awards for 2013-15 of £277,000, which fell due once he had retired. He then sold his long-term incentive plan awards for 2014 on 8 May 2017, the day they matured, for £242,000. Mr Adam commented:
I sold the shares that I was eligible to sell when I was invited to do so by the company as I retired. More than half of the shares in the company that I had an interest in at retirement have been lost as a result of the company entering liquidation.
The committees also published a response from Mr Adam’s successor, Zafar Khan, whose contract with Carillion was terminated last September after eight months in the job. A few days before his contract was ended, Mr Khan had issued a financial update showing things had worsened since July 2017, when Carillion had written off £845m in losses on underperforming contracts, the committee said. They added: “Mr Khan argues that it is surprising that the board were ‘spooked’ by his update, as it should have been apparent to the board by then that the company was struggling to improve both its net debt and profit positions.” Frank Field, chairman of the Work and Pensions Select Committee, accused Mr Adam of “dumping the last of his shares at the first possible moment, because he is – with his own money at least – ‘risk-averse’. What conclusions are we to draw from that?” He added:
The other directors appear keen to set up the hapless Zafar Khan as the fall guy for the collapse. It is not lost on us, however, that he inherited Carillion’s mountain of debt.