Government accuses Carillion board as root to firm's collapse
A “rotten corporate culture” has been used to describe Carillion’s board, who were blamed for the collapse of the company.
Also accused is the government and big four accounting firms of failing to stop Britain’s second biggest construction firm from going under. MPs said regulators should also consider banning the former directors from serving on other company boards, too.
Carillion collapsed under a £1.5bn debt pile in January this year, employing 43,000 people. Thousands lost their jobs.
It also held numerous public contracts, such as the maintenance of schools and prisons, all of which had to be brought under government control, at a cost to the taxpayer.
Speaking to the BBC, Rachel Reeves MP, chair of the business (Beis) committee, said: “Carillion’s collapse was a disaster for all those who lost their jobs and the small businesses, contractors and suppliers left fighting for survival.
“The company’s delusional directors drove Carillion off a cliff and then tried to blame everyone but themselves.
“However, the auditors should also be in the dock for this catastrophic crash. They are guilty of failing to tackle the crisis at Carillion, failing to insist the company paint a true picture of its crippling financial problems.”
Former directors including Richard Adam, Richard Howson and Philip Green have been accused individually. The men had supposedly expanded the firm through poorly judged acquisitions while hiding Carillion’s financial problems from shareholders.
A spokeswoman for the Cabinet Office added: “Our priority has been the continued, safe running of public services and to minimise the impact of Carillion’s insolvency. The plans we put in place have ensured this.
“The government wants to see a strong and varied supplier base where companies of all sizes benefit from long-term and stable government contracts.
“That’s why we have recently announced a number of measures to support government suppliers - strengthening our commitment to prompt payment; protecting staff, businesses and small suppliers from irresponsible directors.”