Carillion bosses are to be questioned by a committee of MPs following the firm’s collapse.
The Work and Pensions and Business, Energy and Industrial Strategy (BEIS) committees have launched a joint inquiry into the collapse of the construction giant and will be investigating how a company that was signed off by KPMG as a going concern in spring 2017 could go into liquidation with a reported £5bn of liabilities and just £29m left in cash less than a year later.
The committees are initially bringing in a series of former directors, the Insolvency Service, which will be investigating the company’s descent into bankruptcy, and the Financial Reporting Council, which regulates the auditors that signed off the company’s accounts.
The committees have confirmed that they will call several Carillion bosses as witnesses to evidence sessions on 6 February.
They include former chief executive Richard Howson, chairman Philip Green, interim boss Keith Cochrane and ex-finance chiefs Richard Adam, Zafar Khan and Emma Mercer.
The committees will also probe the role of Carillion’s auditor, KPMG, which signed off the group’s 2016 accounts. Robin Ellison, chairman of trustees of Carillion’s pension scheme, will also be questioned.
Rachel Reeves MP, chair of the BEIS Committee, said: “In the wake of the BHS scandal, Carillion has the hallmarks of another corporate governance failure with directors asleep at the wheel while the business went off a cliff, in this case leaving jobs, pensions and public services under threat and a host of suppliers out of pocket. How is it that so many warning signs were ignored by the company and the government?
“What were the Carillion board and senior management doing to address the spiralling problems at the company? Why are the regulatory bodies stepping in only after Carillion’s collapse?
“As a committee we will also want to explore the executive pay arrangements at Carillion, the potential cost to the taxpayer of the insolvency, and the role of both directors and non-executive directors in the company’s collapse.”
Frank Field MP, chair of the Work and Pensions Select Committee, said: “It must also be time now for the auditors who cosily signed off this disaster-in-the-making as a ‘going concern’ less than a year ago to begin to account for themselves.”
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