Findings in relation to Mr Adam and Mr Khan, and confirming enforcement action against three further individuals
News types: Investigations
Published: 12 May 2026
This Press Notice concerns the outcome of an investigation into the relevant Members or Former Members (as defined in the FRC’s Accountancy Scheme). It would not be fair to treat any part of this announcement as constituting or evidencing an investigation into, or findings in respect of the conduct of, any other persons or entities.
The Financial Reporting Council (FRC) has imposed sanctions against two former Group Finance Directors of Carillion plc (Carillion). Both acted recklessly and failed to act with integrity in connection with the preparation of accounting information for Carillion’s financial statements, prior to the company’s collapse in 2018.
Former Group Finance Director, Mr Richard Adam, and his successor in that role (and previously Carillion’s Financial Controller), Mr Zafar Khan, have accepted their Misconduct[1] in respect of several areas of Carillion’s business, including certain specific transactions, major UK construction contracts and a supply chain finance facility, that were each material to the company’s reported financial performance in one or more financial years between 2013 and 2016 inclusive and the half year to 2017.
Executive Counsel has also imposed sanctions on three other former Carillion senior accountants who acted recklessly and failed to act with integrity in connection with the preparation of accounting information for Carillion’s financial statements, prior to the company’s collapse in 2018. The FRC’s Conduct Committee has decided not to name any of those three individuals, or to publish full details of their Misconduct, having taken into account certain specific and exceptional circumstances of a confidential nature which affect their cases.
The following sanctions were imposed as part of the agreed settlements:
Mr Richard Adam
- Exclusion from the ICAEW[2] for a recommended period of 15 years.
- A financial sanction of £550,000 reduced to £222,019 to take into account a fine of £232,830 imposed by the Financial Conduct Authority (FCA) in respect of related events,[3] and a settlement discount.
- A severe reprimand.
Mr Zafar Khan
- Exclusion from the ICAEW for a recommended period of 10 years.
- A financial sanction of £225,000 reduced to £60,228 to take into account a fine of £138,960 imposed by the FCA in respect of related events, and a settlement discount.
- A severe reprimand.
Senior Accountant A
- Exclusion from their relevant Recognised Supervisory Body for a recommended period of 8 years.
- A financial sanction of £70,000 discounted for settlement to £45,500.
- A severe reprimand.
Senior Accountant B
- Exclusion from their relevant Recognised Supervisory Body for a recommended period of 5 years.
- A financial sanction of £40,000 discounted for settlement to £26,000.
- A severe reprimand.
Senior Accountant C
- Exclusion from their relevant Recognised Supervisory Body for a recommended period of 2 years.
- A financial sanction of £40,000 discounted for settlement to £26,000.
- A severe reprimand.
The terms of the settlements agreed by the Executive Counsel were approved by a member of the independent Tribunal Panel.
Background
Prior to going into liquidation in January 2018, Carillion was a leading UK based multinational construction and facilities management services company. The company employed around 43,000 people globally, was listed on the main market of the London Stock Exchange and had multiple contracts with public authorities.
In July 2017, Carillion issued a profit warning and announced an expected provision against its construction contracts of approximately £845 million. In September 2017, Carillion announced a further provision of approximately £200 million and a first half loss of approximately £1.15 billion.
In November 2017, Carillion issued another profit warning and indicated that it would breach its banking covenants the following month. On 15 January 2018, Carillion was placed into compulsory liquidation. Carillion’s failure amounted to one of the biggest corporate failures in UK history.
Penrose Foss, Executive Counsel, Executive Director of Investigations and Enforcement, said:
“It is critical that any individual who is responsible for preparing accurate financial information, whatever their level of seniority, undertakes their duties with integrity. This is a fundamental requirement for every organisation. For a large publicly listed company, the consequences of failing to meet this requirement can be wide-ranging, affecting investors suppliers, employees, and the many communities served by an organisation across the UK and beyond.
In this case, there was a sustained failure by Mr Adam in his role as Group Finance Director, and by his successor Mr Khan over a shorter period, to act with integrity and ensure the accuracy of financial information relating to several business areas significant in Carillion’s financial reporting. The FRC has also secured admissions from three further individuals.
The substantial sanctions imposed on these five individuals reflect the gravity of their failure to discharge their respective obligations to act with integrity in preparing financial information in the context of a large, listed company.”
Read the Settlement Agreements for Richard Adam and Zafar Khan, and their joint Particulars of Facts and Acts of Misconduct, edited for publication. The FRC made no findings, and no admissions were made by, Mr Adam, Mr Khan or the three unnamed individuals, that any of them acted dishonestly or deliberately. However, each admits acting recklessly, and failing to act with integrity.
The FRC previously announced enforcement action in relation to KPMG’s statutory audits of the financial statements of Carillion plc: Publication of Final Settlement Decision Notices in respect of KPMG and two former partners. Today’s announcement marks the conclusion of the FRC’s investigations arising out of Carillion’s collapse.
Read the Particulars of Facts and Acts of Misconduct
Footnotes
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[1]
Misconduct is defined in the FRC’s Accountancy Scheme as “as an act or omission or series of acts of omissions by a Member or Member Firm in the course of their professional activities…which falls significantly short of the standards reasonably expected of a Member or Member Firm or has brought or is likely to bring discredit to the Member or Member Firm or to the accountancy profession.”
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[2]
Institute of Chartered Accountants in England and Wales (ICAEW)
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[3]
The FCA recently announced they had fined Mr Adam, Mr Khan and, the former CEO of Carillion, Mr Richard Howson, for their part in misleading statements being issued by Carillion plc: Publication of FCA fines former finance directors of Carillion plc (in liquidation); FCA fines former chief executive of Carillion plc (in liquidation)