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Kingspan directors sold £5m in shares just weeks before Grenfell Inquiry revelations
Two directors of insulation manufacturer Kingspan sold more than £5m in shares three weeks before serious revelations about one of the company’s leading brands were made public at the Grenfell Inquiry.
Gilbert McCarthy, the firm’s managing director, sold 26,042 shares on 15 October, netting £2.25m, while chief executive Gene Murtagh sold 43,120 two days earlier, netting €3.45m – roughly £3.07m.
The company’s share price has since fallen by around 10% – although it is unclear whether this is because of the revelations at the inquiry.
On 29 October, the firm withdrew a testing certificate covering a system including Kooltherm K15, one of its leading brands in the UK, due to issues with its testing.
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Kingspan claims about suitability of its insulation for high rises ‘a house of cards’, inquiry hears
When opening statements were delivered at the inquiry on 5 November, it emerged that Kooltherm K15 had passed a fire test as part of a cladding system in 2005, but its chemical formula was changed a year later, meaning the product on the market no longer represented the material tested.
It went on to fail tests in 2007 and 2008, with neither the results of these tests nor the change to the product disclosed to the market or the regulatory bodies that certified it for use on high-rises.
The inquiry heard Kingspan wrote to testing house the Building Research Establishment on 29 October, asking for the test certificate covering the 2005 test to be withdrawn.
Richard Millett QC, counsel to the inquiry, said this had been a line of investigation pursued by the inquiry for two years and “raises very serious questions” about why the product was not withdrawn sooner.
Lawyers for the survivors of the Grenfell Tower fire, where K15 was one of the components in the facade, described the firm’s actions as a “seminally causative role” in regard to the fire, as its testing and marketing “set the precedent” that combustible insulation could be used on high rises.
Both Mr McCarthy and Mr Murtagh continue to hold shares in the company worth close to €100m and both have made significant sales of shares at other stages over the past year – including one sale by Mr Murtagh in February worth more than the amount traded in October.
There is no suggestion that either the firm or the directors have broken any rules or laws, and Kingspan declined to comment.
In its opening statement to the inquiry, the firm said that it was “important to emphasise that a large-scale fire test is a test of the entire cladding system and not K15 in isolation”.
“Thus a failed test means that the cladding system as a whole has failed and does not necessarily mean that there is a problem with the insulation,” it said.
The firm said it has published details of 15 systems that passed the test successfully.
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