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Bonuses blocked for Carillion bosses

By Pete Madeley | Business | Published:

Bonus payments to Carillion directors have been stopped after the date of liquidation, according to the Insolvency Service.

Bonus payments to Carillion directors have been stopped after the date of liquidation

The payments include severance payments to former executives of the firm, which collapsed on Monday with spiralling debts.

A spokesman for the Insolvency Service said: "Any bonus payment to directors, beyond the liquidation date, have been stopped and this includes the severance payments which were being paid to some senior executives who left the company."

It came as it was confirmed that workers on the majority of private sector contracts held by the failed Wolverhampton-based company will continue to be paid.

The Insolvency Service announced that 90 per cent of the company's private customers had indicated they want it to carry on providing services until new suppliers can be found and will provide funding to keep employees on.

The announcement came as a 48-hour period of support for firms working on Carillion's private sector contracts approached its end, with thousands of workers – including around 400 in Wolverhampton – uncertain about their future.

The company's interim chief executive has revealed that Carillion had just £29 million in cash when it went bust, at a time when it was struggling under £900 million of debt and a £587 million pension deficit.

Stephen Pegge, of the trade organisation UK Finance said: "UK banks and the Government are working closely to make sure the impact of the Carillion liquidation on SMEs (small and medium-sized enterprises) in the supply chain is understood and managed in a way that best supports those in need of assistance.

"Lenders are contacting customers and, where appropriate, are putting in place emergency measures, including overdraft extensions, payment holidays and fee waivers to ensure those facing short term issues can be helped to stay on track."

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In High Court papers, Carillion's interim chief executive Keith Cochrane revealed the company made a 'formal request' for support from the Government on December 31 following talks during the final months of 2017.

Up until as recently as Sunday, directors believed a 'constructive dialogue regarding short-term funding' was under way in order to rescue the company, he said.

However, while discussions were ongoing, Mr Cochrane accused the Royal Bank of Scotland (RBS) of taking 'unilateral action which in the company's view undermined the group's efforts to conserve cash'.

Carillion's share price has plunged more than 70 per cent in the past six months after a string of profit warnings.

Pete Madeley

By Pete Madeley
@P_Madeley_Star

Political Editor for the Express & Star. Responsible for local and national political stories, opinion, comment and analysis.

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