Carillion “hoodwinked the Government and many others” with published accounts – and further questions on Big 4 conflicts of interest emerge
Commenting on today’s NAO report, Investigation into the government’s handling of the collapse of Carillion, Rt Hon Frank Field MP, Chair of the Work and Pensions Committee, said:
“This invaluable report adds new weight to what we found: Carillion hoodwinked the Government as they did many others who were so naïve as to trust their published accounts. Philip Green, Richard Howson and Richard Adam were desperate to attribute their company’s explosion to some of its more exotic forays overseas. But the NAO’s explanations of why common or garden UK public sector construction contracts failed betray extraordinarily negligent planning. Surely they could not have been so incompetent? It is difficult to shake the impression that this was conscious cash-chasing, bugger the long term consequences and bugger the interests of suppliers, workers and pensioners.
“As Special Managers, with a contract to print money awarded without any competition, PwC will draw £50 million for six months’ work. More money for PwC is less money for sub-contractors and the PPF. We have further questions about those payments—and how PwC’s conflicts of interest arising from their long history of work on Carillion are being managed—and have written to PwC and the Official Receiver requesting further information. I am particularly concerned that PwC’s conflicts could jeopardise action against individual directors.”
Rachel Reeves MP, Chair of the BEIS Committee, said:
“Carillion was the gift that kept on giving – for the Big Four, at least, as they raked in millions for their audit and other work. The collapse of Carillion was a catastrophe for those who lost their jobs and the small businesses, contractors and suppliers left fighting for survival. The company’s failure has left the taxpayer with a bloody nose too as we are all left on the hook for the vast sums needed to clean up this mess.
“The dice are loaded in the Big Four’s favour. They make a killing in fees advising struggling companies how to turn them round and then they pocket millions tidying up when that advice fails On Carillion, taxpayers are left to foot the multimillion pound bill for corporate failure. PwC, who profited from Carillion as it inched towards collapse, are expected to wring at least another £50 million from its ruins as the Government appointed Special Managers to the insolvency, while thousands of smaller creditors will get nothing at all”.