Richard Howson, Carillion chief executive 2012–2017

analysisRichard Howson led Carillion plc as Group Chief Executive from 1 January 2012 until 10 July 2017, when he was removed from the post as the company issued its profit warning. Before that he had been Chief Operating Officer, and he had joined the board on 10 December 2009: Companies House records Richard John Howson as a director of Carillion plc from 10 December 2009 to 10 July 2017, and the FCA gives the same tenure as chief executive. According to the House of Commons committees' May 2018 report, Howson did not leave the company on his removal. He stayed on in a lesser role, responsible for collecting cash on key contracts and boosting morale in the UK construction business, until September 2017, and continued to receive his full contractual salary until Carillion entered liquidation. ^{1 2 3 4 5 6}

analysisThe committees' report states that Howson had been at the company since its formation in 1999, and Carillion's annual reports describe him as a Fellow of the Institution of Civil Engineers with 19 years' service in various roles (2014 report) and 22 years (2016 report), listing his past roles as Chief Operating Officer, Executive Director responsible for UK Construction and Middle East and North Africa, and Managing Director, Middle East and North Africa, all at Carillion plc. Howson also sat on the boards of other Carillion companies. His Companies House officer record lists 61 appointments, among them director of Carillion Construction Limited from 10 December 2009; of Carillion Services Limited, Carillion Services 2006 Limited and Carillion (AMBS) Limited from 15 December 2010; of Carillion JM Limited and Carillion MENA Limited from 6 February 2012; and of Amber LEP Investments Limited from 19 October 2012. Each of these directorships, like every other directorship on the first page of the list apart from John Wood Group Limited, is recorded as ending on 15 January 2018, the date on which the winding up of Carillion plc commenced. ^{5 2 1 7 8 9}

analysisCarillion's 2014 annual report states that Howson held no external appointments. The 2016 report lists three: Chairman of Business in the Community's Community Leadership Team, Chairman of the CBI's Construction Council and Non-Executive Director of John Wood Group PLC, and it states that he retained the fee of £35,374 paid in 2016 for the Wood Group role. Companies House records him as a director of John Wood Group Limited from 12 May 2016 to 17 January 2018. ^{1 2 3}

analysisWhen Howson became Chief Executive on 1 January 2012 his base salary was set at £560,000, below the £632,000 paid to his predecessor John McDonough, according to Carillion's 2014 remuneration report. That report records a 9% rise to £610,400 from 1 January 2015 and a further 8% increase to £660,000 intended from 1 January 2016, subject to continued strong business and personal performance. The 2016 report confirms a base salary of £660,000 for 2016, unchanged for 2017, and shows an 8% rise in his salary and fees between 2015 and 2016 against 2% for UK employees. The House of Commons committees' May 2018 report attributes the rises to benchmarking commissioned from Deloitte in 2015 but gives them in the opposite order, 8% in 2015 and 9% in 2016. ^{2 1 4 5}

analysisCarillion's remuneration reports give Howson's single total figure of remuneration as £791 thousand for 2012, £1,034 thousand for 2013 and £1,024 thousand for 2014, the 2014 figure made up of salary of £560 thousand, benefits of £20 thousand, a bonus of £246 thousand and pension of £198 thousand, with no long-term incentive vesting; his annual bonuses were 36% (2013) and 44% (2014) of the maximum opportunity. The figure was £1,283 thousand for 2015 and £1,510 thousand for 2016, when it comprised salary of £660 thousand, benefits of £28 thousand, a bonus of £245 thousand, long-term incentives of £346 thousand and pension of £231 thousand. The 2016 bonus was 37.125% of salary, with no amount earned on the earnings-per-share and cash-conversion targets; the committees put it as a bonus of £245,000 (37% of his salary) received despite meeting none of his financial performance targets, in a year when his total remuneration rose to £1.5 million. Howson owned 121,789 Carillion plc shares outright at 31 December 2014 and 137,487 at 31 December 2016, and as an executive director also held unvested LEAP awards and deferred bonus shares. ^{2 4 1 5}

analysisThe House of Commons committees' May 2018 report concluded that Howson 'was the figurehead for a business model that was doomed to fail' and that, as the longstanding leader who took Carillion to the brink, he should accept that he 'was part of the problem rather than part of the solution'. These are conclusions of a parliamentary inquiry, not findings of a court or regulator. In oral evidence, as the committees record, Howson had said that 'but for a few very challenging contracts, predominantly in the Oman and one in Qatar, I believe Carillion would have survived', and that the business was in a sustainable position when he was removed. His written response, published in the committees' special report of July 2018, said that the report had not considered all the issues key to understanding why Carillion went into liquidation and had omitted or ignored some of the more significant evidence, and that the reasons for Carillion's demise were mixed and varied. Howson accepted that debt was too high but said he had been committed to working through the challenging contracts and reducing it, and argued that the final months before the liquidation, when 4 of the 5 experienced divisional managing directors were removed from their roles, and the amounts owed by government customers should have been examined. Regulatory outcomes came later. On 4 October 2023 the Insolvency Service announced that it had accepted an 8-year disqualification undertaking from Howson for his conduct as a director of Carillion plc; a legal briefing by the non-executive directors' lawyers states that none of the three executives' undertakings involved any admission as to the alleged fraud or any direct knowledge of or involvement in preparing incorrect accounts. Following an initial Decision Notice dated 24 June 2022, the FCA fined Howson £237,700, announced on 16 February 2026, after he withdrew his challenge; it found that between 1 July 2016 and 10 July 2017 he acted recklessly and was knowingly concerned in breaches by Carillion of the Market Abuse Regulation and the Listing Rules. ^{1 2 3 4 5}

analysisHowson's response also addressed money owed to Carillion by the public sector. On the National Offender Management Service contract for facilities management of prisons in the south of England, he wrote, the government's tender documents had 'completely underestimated' the size of the estate, which turned out some 60% bigger by number of assets, and Carillion bore significant additional costs for which it was not paid. When he left, he said, substantial amounts were properly due to Carillion from government or government-owned entities on a range of contracts, for example the MoD on NGEC, Highways England, Transport for Scotland, NOMS and Network Rail, and he understood that similar large amounts were still outstanding at the liquidation. The letter does not quantify those amounts. The National Audit Office recorded that in January 2018 Carillion put the disputed claims and invoices it wanted settled at £39 million, and that many public sector customers, including the special purpose vehicles delivering PFI contracts, dispute outstanding invoices relating to the period before liquidation. On the prisons contract the NAO reported that the lenders' advisers attributed the losses to its being a 'first generation' outsourcing contract and to inaccurate tender assumptions, and that the government does not necessarily agree with the size of the losses on the four loss-making contracts it lists; Carillion's own January 2018 business plan described NOMS as a loss-making contract against which a group provision had been made in 2017 and added a further £11m for it. ^{1 6 7}

analysisFor Carillion's side of a £200 million dispute with Msheireb Properties in Qatar, the committees' report cites Howson's oral evidence (Q482). Msheireb Properties' letter summarises that evidence as stating that Carillion was owed £180–200 million by Msheireb Properties when he left the business (given in the letter as March 2017) and that Carillion's works were due to finish in May 2017. Msheireb Properties 'entirely disputes' that it owed that sum, suggesting that the figure may refer to the value of construction work remaining to be completed plus delay claims not yet established, and says that after the extensions of time granted the completion date was September 2016, not May 2017. In his later response to the committees, Howson said that the payment problems Carillion faced with Msheireb Properties had also been experienced by a number of other contractors and sub-contractors in Qatar. Howson's evidence as summarised by the counterparty and his own later letter are party statements, and neither the amount nor the completion date was determined in the retained documents. ^{8 1 2}

analysisThe FCA's case against Howson concerned Carillion's market announcements. In Decision Notices dated 24 June 2022 and published on 28 July 2022, the FCA decided to fine him £397,800, and the former finance directors Richard Adam £318,000 and Zafar Khan £154,400; it considered that each acted recklessly and was knowingly concerned in Carillion's contraventions, being aware of the deteriorating expected performance of the UK construction business without ensuring that the announcements reflected it or making the Board and Audit Committee aware of it. All three contested the decisions by referring them to the Upper Tribunal, and the FCA stated that its findings were provisional and that the action had no effect pending the Tribunal's determination. Each later withdrew his challenge. The FCA imposed final penalties of £232,800 on Adam and £138,900 on Khan in January 2026 and, announcing it on 16 February 2026, £237,700 on Howson. In that decision the FCA found that Howson, Chief Executive from 1 January 2012 to 10 July 2017, acted recklessly and was knowingly concerned, between 1 July 2016 and 10 July 2017, in Carillion's breaches of Article 15 of the Market Abuse Regulation, Listing Rule 1.3.3R, Listing Principle 1 and Premium Listing Principle 2: aware of serious financial troubles in the UK construction business, he did not reflect them in announcements or alert the board and audit committee. The FCA noted that primary responsibility for the accuracy of financial information lay with the group finance director, while Howson was the board member with most construction expertise. The findings became final after Howson withdrew his reference; the FCA's press release does not state that he admitted them. ^{1 2 3}

analysisOn 4 October 2023 the Insolvency Service, acting for the Secretary of State for Business and Trade, announced that it had accepted an 8-year disqualification undertaking from Howson, described as Chief Executive Officer of Carillion Plc until 10 July 2017, for his conduct as a director of Carillion Plc. Companies House records the undertaking as given on 4 October 2023 under section 7 of the Company Directors Disqualification Act 1986 and as running from 25 October 2023 to 24 October 2031. ^{1 2}

analysisThe announcement sets out the grounds that accompanied the Insolvency Service's acceptance of the undertaking, which runs from 25 October 2023 to 24 October 2031, each framed as conduct of which Howson ought to have known. First, it states that he caused Carillion plc to account for and report the performance of its major construction contracts (Royal Liverpool University Hospital, Battersea Power Station, the Aberdeen Western Peripheral Route, Midlands Metropolitan Hospital and Msheireb Phase 1(B)) in the 2015 and 2016 financial statements in a way he ought to have known falsified and concealed their deterioration: the 2015 misstatement on those contracts was £95.4m, so that profit should have been £65.3m rather than the £155.1m reported, and in 2016 misstatements of £179.2m on the contracts and £29.3m on the Ecopod and Geneva transactions meant that a loss of £61.7m should have been reported instead of a £146.7m profit. Second, it states that he caused Carillion to procure payments from Wipro in 2013 (£39.0m, of which £25.0m for Ecopod under an IP assignment agreement and £14.0m of termination charges) and 2014 (£2.0m) that were wrongly accounted for as profit in the 2013 financial statements, overstating profit by £39.0m and understating net debt by £41.0m, and payments in 2016 totalling £40.0m that overstated 2016 profit by £34.4m (the Geneva transaction) and understated net debt by £39.2m, and that he ought to have known of the false accounting and of the concealment from the auditors of Carillion's obligation to make repayments to Wipro. Third, it states that he caused Carillion plc to make market announcements on 7 December 2016, 1 March 2017 and 3 May 2017 that he ought to have known were misleading, in breach of Listing Rule 1.3.3R and Article 15 of the Market Abuse Regulation, and to pay a 2016 final dividend of £54.4m on 9 June 2017 that he ought to have known could not be justified by properly prepared accounts and was not in the interests of the company, its members or creditors; a national newspaper later summarised this ground as a £54m dividend signed off in June 2017. These grounds were not tried in court, and according to the non-executive directors' lawyers none of the executives' undertakings involved admissions as to the alleged fraud or direct knowledge of or involvement in preparing incorrect accounts. On the 2016 Wipro transactions, Carillion's 2016 accounts had stated that management concluded, after a benchmarking review, that they should be recognised independently and in their own right. Howson's own July 2018 response to the committees had said that the reasons for Carillion's demise were mixed and varied and that debt was too high, and argued that any examination must cover the final months before liquidation and the amounts owed to Carillion by public-sector customers. Separately, the FCA, whose 2022 notice to Carillion concerned announcements of the same three dates, fined Howson £237,700 in February 2026 for being knowingly concerned in Carillion's breaches between 1 July 2016 and 10 July 2017, after he withdrew his challenge. ^{2 1 3 4 5 6 7}

analysisA national newspaper reported on 19 January 2024 that Howson had been named construction president at TECfusions, a Tampa-based company that builds and renovates data centres and combined heat and power systems, and that he had started there in January 2024. The retained documents contain no company or registry record of the appointment. ¹