Carillion’s former finance director challenges inquiry

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17 May 2018

Richard Adam, former finance director at construction giant Carillion, has denied allegations that he described funding pensions as a “waste of money”.

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Richard Adam, former finance director at construction giant Carillion, has denied allegations that he described funding pensions as a “waste of money”.

Richard Adam, former finance director at construction giant Carillion, has denied allegations that he described funding pensions as a “waste of money”.

Responding to yesterday’s inquiry by the Work and Pensions and BEIS select committees, which highlighted a total pension deficit of £990m as of 2016, Adam said that the quote which was attributed to him amounted to a “mischaracterisation of evidence”.

He stressed that the only evidence for the statement was an attendance note from a meeting of between trustees and The Pensions Regulator, where Robin Ellis, chair of the trustees, allegedly said that Adam considered pensions as a waste of money.

Adam requested the statement to be amended in the report, stating that: “There is no objective evidence that supports the contention that I have ever held or expressed these views.”

The parliamentary committees responded to Adams’ request stating that while they could not assert whether those exact words had been said: “His actions as finance director throughout, led the committees to the inescapable conclusion that he considered funding the Carillion pension schemes to be a waste of money.”

Adam had been in charge of Carillion’s’ finance department for more than 10 years. At the time of the companies departure, the Carillion pension scheme carried £2.6bn in liabilities and a pension deficit of £990bn,  of which a potential £800bn will have to be footed by the Pension Protection Fund (PPF).

While he was finance director, Adam repeatedly disagreed with the pension scheme’s trustees on the valuation of the fund’s deficit, with the trustees and advisory firm Gazelle Corporate Finance accusing Carillion of having attempted to downplay the firm’s deficit levels in a bid to avoid higher deficit reduction payments.

Adam himself is not a member of the firm’s defined benefit (DB) scheme. Instead, the firm’s former directors received employer contributions from a defined contribution (DC) scheme. According to the parliamentary inquiry, Adam received £163,000 for his work in 2016.

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