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Carillion bosses‎ should face ban probe – MPs


Former bosses of Carillion, the construction group that collapsed with debts of as much as £7bn, should face a formal inquiry into their fitness to serve as company directors, MPs will say this week.

Sky News has learnt that an inquiry by two Commons select committees will conclude that a number of Carillion directors‎ should be scrutinised by the Insolvency Service to determine whether boardroom disqualification proceedings are justified.

The recommendation is set to be among the most eye-catching in a searing report to be published on Wednesday by the Work and Pensions and Business, Energy and Industrial Strategy committee‎s.
Their verdict will come four months after Carillion collapsed with total pension liabilities of about £2.6bn and other debts of more than £4bn, making it one of the most financially costly insolvencies for many years.
The £6.9bn total liabilities figure was estimated by the Official Receiver last month.
Philip Green, the chairman at the time of Carillion’s liquidation, and Richard Howson, the chief executive who was ousted last year, are expected to face particular criticism in the MPs’ report, alongside two former finance directors.
The conclusions ‎will intensify the pressure on both the Insolvency Service and the Financial Reporting Council to deliver their own decisions about potential enforcement action in relation to the construction group’s former bosses.
Both regulators have promised to fast-track their inquiries, although any formal disqualification proceedings brought by the Insolvency Service could be academic because Mr Green and his former colleagues have already voluntarily relinquished many of their other roles.

The MPs’ report is not thought to call outright for Carillion’s former directors to be banned from boardrooms, according to one parliamentarian.
‎Carillion employed more than 19,000 people in Britain when it went bust in January after weeks of frantic efforts to save the company, culminating in ministers rejecting Mr Green’s pleas for a Government bailout.
Since then, thousands of jobs have been salvaged as its contracts have been carved up and rehomed with other businesses, but a substantial number have nevertheless been made redundant.
During their inquiry, MPs heard evidence from small business suppliers to Carillion about poor payment practices and from institutional shareholders who say they were kept in the dark about the company’s precarious finances.
Carillion was one of Britain’s leading builders of new schools and hospitals, and its collapse has raised urgent questions about the provision of critical infrastructure by the private sector.

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The Pensions Regulator and KPMG, which was Carillion’s auditor, ‎also face stinging criticism in the select committee report, although one source familiar with it denied speculation that it would demand a merger of the pensions watchdog and the Pension Protection Fund.
A spokesman for the ‎select committees declined to comment on Sunday night.

Source: Sky

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