Home Business NewsBusiness Carillion board minutes reveal last CFO blew the whistle on accounting irregularities

Carillion board minutes reveal last CFO blew the whistle on accounting irregularities

27th Feb 18 9:34 am

The saga continues 

The Committees are today publishing follow up inquiries to Emma Mercer, Carillion’s last Financial Director, who took up the job when Zafar Khan was forced out in September 2017.

The queries are prompted by minutes of Carillion board meetings which show that, upon her return from Canada and just six weeks into the job as FD of Construction Services in the UK, Emma Mercer was raising concerns about the accounts she found – or “whistle-blowing” as it is described in the minutes. 

Apparently not satisfied with the response she got from then CEO Richard Howson or FD Zafar Khan when she flagged these concerns, so took them up with the Group HR Director.

The minutes (attached) show: 

She [Emma Mercer] had advised Mr Adam Green, the MD, that she had identified some issues with which she was not comfortable. Mr Adam Green alerted Mr Howson on 15 April, and asked Mr Khan to discuss the position with her.”

“On 3 May, Mrs Mercer had raised with Mrs Dawson [Group HR Director] that she had concerns, and Mr Howson met with Mrs Mercer on 5 May”

Mrs Horner [Chair of the Remuneration Committee] “noted that Mrs Mercer appeared to be a whistle-blower who did not feel she was listened to – hence her conversation with Mrs Dawson.”

Mrs Mercer’s revelations threw up some serious questions, not least for the Company’s auditors, KPMG. At stake was whether the 2016 year-end traded position could still be supported:

“Mr Khan noted that KPMG had been surprised that the issue had not been identified as the two key leads were intimately familiar with the construction contracts. Mr Dougal confirmed he had spoken to Mr Meehan, who had indicated that KPMG needed to review and reassess the judgments on each contract. They would separately have to consider the position at the year-end and thereafter to assess the traded position subsequent to the year-end.”

“Given the obvious significance of the two main contracts we needed to review the traded position – his [Zafar Khan’s] view was that there had been incompetence and laziness in the accounting review of the contract and in recognising the position.”

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