Ministers have launched legal action against eight former directors of collapsed outsourcing giant Carillion, a move that could see them banned from serving as directors for up to 15 years.
Nearly three years after the firm went bust, business secretary Kwasi Kwarteng has brought proceedings against the former chairman, two chief executives, two finance chiefs, and three others.
The Telegraph reported that legal action began on Tuesday, just days before the deadline to do so.
Ministers took the decision to open proceedings after receiving a report from the Official Receiver.
It is believed that it is in the public interest to ban the eight from serving as directors as they are unfit to do so.
Carillion’s collapse came with the firm £7bn in debt, and saw around 3,000 people laid off. In the run-up to the failure, senior executives were paid millions of pounds.
An inquiry into the collapse carried out by MPs described the collapse as “a story of recklessness, hubris and greed”, and said that the firm’s business model was “a relentless dash for cash”.
The collapse triggered serious questions about the independence of the “Big Four” auditors PwC, EY, KPMG, and Deloitte, all of which were involved with Carillion.
In November, the Financial Conduct Authority (FCA) said that it was planning on taking further action against the company for misleading shareholders.
In a warning notice, the watchdog said that a number of senior executives were “knowingly concerned” in numerous breaches of market rules, and had acted “recklessly”.
The Insolvency Service said: “We can confirm that the Secretary of State issued company director disqualification proceedings in the public interest against eight directors and former directors of Carillion.”
Unite, the union, welcomed the move but said that it should have come earlier.
“Carillion’s collapse was not a victimless white-collar crime as thousands of workers lost their jobs. If executives and directors had reported honestly on Carillion’s financial predicament, many of those job losses could have been avoided”, said assistant general secretary Gail Cartmail.
“We would like to see those responsible for the Carillion debacle to be charged and appear in court. Without a doubt Carillion had been trading while insolvent for some time before its collapse.”