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Timeline: Carillion inquiry charts road to ruin

MPs have published a timeline charting the build-up to Carillion’s collapse as part of the joint inquiry’s final report on the contractor.

Feb 06 Acquisition of Mowlem for £350m
Apr 07 Richard Adam appointed to board as finance director
Feb 08 Acquisition of Alfred McAlpine for £565m
Dec 09 Richard Howson appointed to board as executive director
Sep 10 Richard Howson appointed chief operating officer, remaining on the board
Apr 11 Acquisition of Eaga for £298m
Jun 11 Philip Green appointed to board as senior non-executive director
Jan 12 Richard Howson appointed chief executive
Dec 13 Alison Horner appointed to board as non-executive director
May 14 Philip Green appointed chairman
Jul 15 Keith Cochrane appointed to board as senior independent non-executive director
Dec 16 Richard Adam retires as finance director
1 Jan Zafar Khan appointed to board as finance director
1 Mar 2016 annual report and accounts signed and published | Richard Adam sells entire existing shareholding for £534,000.19
End of March-15 Apr Emma Mercer brough in as finance director of construction services; brings to the attention of Richard Howson and Zafar Khan “some issues with which she was not comfortable”
8 May Richard Adam’s long-term incentive plan awards for 2014 vested; he sells the total amount for £242,000
May The board conducts a review of accounting treatment for receivables following Ms Mercer’s concerns, which is reviewed by KPMG. The review concludes that assets had been misclassified but there had been no misstatement of revenue. Acted as a trigger for wider review of contract positions
7 Jun Board holds “lessons learned” exercise which considers cultural, managerial and operational shortcomings
8 Jun The board considers a presentation on a possible equity issue
9 Jun Final dividend for 2016 is paid, worth £55m
4–5 July The chairman and then the board are informed that brokers are not able to underwrite the proposed equity issue and are advised that a trading update should be made on 10 July. Philip Green remains hopeful for a “positive and upbeat” announcement to the market
9 Jul Richard Howson steps down as chief executive, replaced by Keith Cochrane as interim CEO. The board agrees a contract provision of £845m to be included in its interim 2017 financial results
10 Jul Carillion announces the £845m contract provision and comprehensive review of the group’s business and capital structure
12 Jul Carillion’s share value falls 70 per cent from 10 July
14 Jul EY appointed to support its strategic review with a focus on cost reduction and cash collection. HSBC appointed as new broker
August The board identifies a need to put in place further short-term committed bank facilities
3 Sep Zafar Khan “spooks” the board with a financial update
11 Sep Zafar Khan sacked as finance director and Emma Mercer appointed as his replacement. New non-executive directors appointed and transformation officer seconded in from EY
29 Sep Half-year results published, featuring a further £200m profit writedown
24 Oct Deferral of pension deficit contributions is agreed, releasing £100m unsecured and £40m secured new bank finance
17 Nov Third profit warning issued, alongside announcement that the company is heading towards a breach of its debt covenants
First week of Dec Changed assumptions in weekly cashflow materially reduce the company’s short-term cashflow forecasts
11 Dec Kiltearn Partners, the largest shareholder in Carillion, halves its stake
22 Dec Cashflow forecast is delivered to creditors showing the company will have less than £20m of available cash in March 2018. As a result, Carillion is unable to make further drawings under its £100m unsecured facility without further waivers being granted by each of them
Late December New lenders inform the company that a further waiver would not be given unless an approach was made by the company to government
31 Dec The company submits a formal request for support to government
3 Jan Financial Conduct Authority notifies Carillion that it has commenced an investigation into the timeliness of announcements made by the company between 7 December 2016 and 10 July 2017
4 Jan Carillion meets government officials to discuss status of restructuring efforts and the need for short and long-term funding
9 Jan The company meets with HMRC to explore the possibility of deferred payment in respect of tax liabilities, which were otherwise due in January, February, March and April 2018. The outcome is inconclusive
12 Jan Carillion pays £6.4m to a series of advisers and lawyers, including KPMG (£78,000), FTI Consulting (£1m), EY (£2.5m) and Slaughter and May (£1.2m)
13 Jan The company sends a letter to the Cabinet Office making a final request of £160m including an immediate £10m
14 Jan Cabinet Office informs the company that it is not willing to provide such support to the company. The board concludes that the company is insolvent; 45 directors present a court petition for the compulsory winding-up of the company on the grounds it was unable to pay its debts; official receiver appointed as liquidator, with PwC appointed special managers
15 Jan Directors presented a petition to the Court for the compulsory winding up of the company on the grounds it was unable to pay its debts.46 Accepted by the Courts and Official Receiver appointed as liquidator, with PwC appointed as Special Managers to assist with the liquidation. Government announced they were making £150 million available to support the liquidation and laying a contingent liability to indemnify the Official Receiver.47
16 Jan Business secretary Greg Clark writes to the Insolvency Service and the official receiver asking them to fast-track their investigation into the causes of Carillion’s failure and the conduct of the directors
18 Jan The Pensions Regulator announces it is launching an anti-avoidance investigation into Carillion’s funding of their pension schemes
24 Jan Work and pensions and business select committees launch a joint inquiry into the management and governance of Carillion, its sponsorship of its pension schemes, and wider implications for company and pension scheme law, regulation and policy
29 Jan FRC announces investigations into the 2014, 2015 and 2016 KPMG audits of Carillion
19 Mar FRC announces investigation into the preparation and approval of Carillion’s financial statements by Richard Adam and Zafar Khan

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