British MPs accuse auditors, regulators and Carillion directors for its demise

Thursday 17 May 2018 10:32 CET | News

The House of Commons Work and Pensions and the Business, Energy and Industrial Strategy committees have pointed out the culprits for Carillion`s financial collapse.

The MPs indicated that the four accountancy companies that were responsible for auditing Carillion waved through its financial problems, thusly exposing systemic flaws in corporate Britain, according to BBC.

Ernst & Young, one of Carillion’s audit companies, was paid GBP 10.8 million for six months of failed turnaround advice. Deloitte received GBP 10 million to be Carillions internal auditor, but failed to identify failings in financial controls. KPMG did not question, the online publication continues.

Carillion’s former directors have reportedly grown the company through ill-judged acquisitions while hiding Carillions financial problems from shareholders. The MPs added that even as the company publicly began to unravel, the board was concerned with increasing and protecting generous executive bonuses.

The MPs also accused regulators of being too passive in tackling Carillions problems, and said the government had failed to spot the risks because of its ineffective system of oversight, BBC added.

Carillion has collapsed under a GBP 1.5 billion debt pile in January 2018. It employed 43,000 people, about 20,000 of them in the UK, thousands of whom have 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.

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Keywords: House of Commons, Wok and Pensions Committee, UK, Business Committee, Carillion,
Countries: World