Carillion chiefs admit failures as they face down MPs

The former head of defunct construction giant Carillion has admitted he should have acted sooner before its collapse, while the firm's finance chief denied being `asleep at the wheel'.

Former boss Keith Cochrane, who is among a string of executives being grilled by MPs, claimed all the decisions he took were in the best interests of the company.

But he added: `Clearly the business did have issues - undoubtedly. And clearly, do I wish we had done something about it sooner? Absolutely. I recognise that.

`I can assure you that all the decisions I took in seeking to do the best thing for the business at that juncture.'

The appearance of Carillion directors, including former finance chief Zafar Khan, comes just weeks after the outsourcing and construction giant collapsed in mid-January.

Carillion was struggling under nearly £900 million of debt and last year reported a £587 million pension deficit when it fell into liquidation.

When pressed about his responsibilities, Mr Cochrane added: `From my perspective as non-executive director during this period of time, the role of the board was to challenge on the basis of information that was provided from management, that is what we sought to do.'

Mr Khan, meanwhile, denied being `asleep at the wheel' and expressed his surprise over the firm's liquidation.

He said that Carillion was grappling with mounting debt, significantly underperforming contracts and tough construction markets in the UK.

Despite the precarious position the company found itself in, Mr Khan insisted he `did everything' he could have done.

`No, I don't believe I was asleep at the wheel because as soon as I came into the role, we were looking to tackle the issues and the key focus of my time in the role was to bring net debt down.'

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

When pushed by MPs on the Business and Pensions Committees, he added that he did not expect the company to collapse.

`I was surprised at the outcome that eventually came to pass,' Mr Khan said.'

Chief executive Keith Cochrane has been criticised by MPs for saying `the business got itself into this position', referring to the financial difficulties that eventually led to its collapse.

When pressed about his responsibilities, Mr Cochrane said: `From my perspective as non-executive director during this period of time, the role of the board was to challenge on the basis of information that was provided from management, that is what we sought to do.'

He added: `Clearly the business did have issues - undoubtedly. And clearly, do I wish we had done something about it sooner? Absolutely. I recognise that.

`Again with the benefit of hindsight but at the time, I can assure you that all the decisions I took in seeking to do the best thing for the business at that juncture.'

Former finance director Zafar Khan said a big issue for the firm was growing debt, combined with a number of challenges', including four large contracts that wereunderperforming significantly', and construction markets in the UK being difficult.

When pushed by MPs, he said he did not expect the company to collapse.

`Yes, I was surprised at the outcome that eventually came to pass,' Mr Khan said.

`No, I don't believe I was asleep at the wheel because as soon as I came into the role, we were looking to tackle the issues and the key focus of my time in the role was to bring net debt down.'

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

Former finance director Zafar Khan said Brexit uncertainty and the 2017 general election impacted the firm's ability to clinch new contracts.

`The challenges that we had in '17 were a number of things coming together at the same time - not replacing those (contract) volumes and coming into the year, as I say, we had some contracts that we were preferred bidders for that continued to drift out to the right because of the Brexit-related uncertainty, and that was amplified by the general election.'

He added: `To my mind (it) had an impact on our ability to replace contracts that were coming off.'

Mr Khan was asked why he was sacked as finance director of Carillion in September 2017, less than nine months on the job.

He said: `As we went through July and August, trading conditions didn't really improve much and things continued to be difficult for us.'

He said he provided the board with further updates in September and not long after was asked to step down.

Mr Khan added: `It was a very short conversation I had with Mr Cochrane, and in the conversation I was told that the update I had provided to the board had spooked the board and certain lenders.'

Mr Cochrane said that part of the reason for asking Mr Khan to resign was that the firm was in the middle of a restructuring programme that required a series of broader management changes.

Given that the business was facing challenges in the UK construction sector, Emma Mercer - who worked in the division - was brought in to replace him.

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