Carillion - Revision history

Designing Buildings at 06:53, 27 July 2022

2022-07-27T06:53:38Z

← Older revision		Revision as of 06:53, 27 July 2022
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	In January 2022, it was reported that KPMG admitted they had misled the regulators during inspections of their work on audits including Carillion.		In January 2022, it was reported that KPMG admitted they had misled the regulators during inspections of their work on audits including Carillion.

−	= Related articles on Designing Buildings ~~Wiki~~ =	+	In July 2022, it was reported that KPMG had been fined £14.4m due to findings of misconduct following a five-week hearing in January and February 2022. Ref https://constructionmanagement.co.uk/carillion-auditor-kpmg-fined-14-4m/ KPMG
		+
		+	= Related articles on Designing Buildings =

	* Advance payment bond.		* Advance payment bond.

Editor: Reverted edits by 88.97.39.126 (talk) to last revision by Designing Buildings

2022-07-11T10:46:29Z

Reverted edits by 88.97.39.126 (talk) to last revision by Designing Buildings

← Older revision		Revision as of 10:46, 11 July 2022
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	== 2021 ==		== 2021 ==

−	In January 2021, business secretary Kwasi Kwarteng launched legal action against eight former directors of Carillion to prevent them from becoming directors of companies. ~~A large group of duped investors begin organising a class action against the ex Directors www.carillionclassaction.com~~	+	In January 2021, business secretary Kwasi Kwarteng launched legal action against eight former directors of Carillion to prevent them from becoming directors of companies.

	== 2022 ==		== 2022 ==

88.97.39.126 at 10:30, 11 July 2022

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← Older revision		Revision as of 10:30, 11 July 2022
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	== 2021 ==		== 2021 ==

−	In January 2021, business secretary Kwasi Kwarteng launched legal action against eight former directors of Carillion to prevent them from becoming directors of companies.	+	In January 2021, business secretary Kwasi Kwarteng launched legal action against eight former directors of Carillion to prevent them from becoming directors of companies. A large group of duped investors begin organising a class action against the ex Directors www.carillionclassaction.com

	== 2022 ==		== 2022 ==

Designing Buildings at 09:17, 11 January 2022

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← Older revision		Revision as of 09:17, 11 January 2022
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	In January 2021, business secretary Kwasi Kwarteng launched legal action against eight former directors of Carillion to prevent them from becoming directors of companies.		In January 2021, business secretary Kwasi Kwarteng launched legal action against eight former directors of Carillion to prevent them from becoming directors of companies.
		+
		+	== 2022 ==
		+
		+	In January 2022, it was reported that KPMG admitted they had misled the regulators during inspections of their work on audits including Carillion.

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

Editor at 17:30, 5 August 2021

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← Older revision		Revision as of 17:30, 5 August 2021
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	* Retention of title.		* Retention of title.
	* Retention.		* Retention.
−	* Sourcing playbook.
	* Step in rights.		* Step in rights.
	* Subcontractor.		* Subcontractor.

Editor at 17:25, 5 August 2021

2021-08-05T17:25:04Z

← Older revision		Revision as of 17:25, 5 August 2021
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	* Retention of title.		* Retention of title.
	* Retention.		* Retention.
		+	* Sourcing playbook.
	* Step in rights.		* Step in rights.
	* Subcontractor.		* Subcontractor.

Designing Buildings at 09:43, 14 January 2021

2021-01-14T09:43:53Z

← Older revision		Revision as of 09:43, 14 January 2021
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	=== Final report ===		=== Final report ===

−	On 16 May 2018, the final report from both the business and work and pensions committees ~~into Carillion~~ was published, concluding that the collapse was the result of 'recklessness, hubris and greed' among directors.	+	On 16 May 2018, the final report from both the business and work and pensions committees was published, concluding that the collapse was the result of 'recklessness, hubris and greed' among directors.

−	~~In a highly critical report, the~~ directors were lambasted for having put their personal financial rewards ahead of other concerns, and for paying out dividends based on profits that were supported by exploiting suppliers. The former finance director Richard Adam, ex-chief executive Richard Howson, and former chairman Philip Green were judged to have 'driven Carillion off a cliff and then tried to blame everyone but themselves.' The report recommended that the Insolvency Service consider barring them from accepting directorships in the future.	+	The directors were lambasted for having put their personal financial rewards ahead of other concerns and for paying out dividends based on profits that were supported by exploiting suppliers. The former finance director Richard Adam, ex-chief executive Richard Howson, and former chairman Philip Green were judged to have 'driven Carillion off a cliff and then tried to blame everyone but themselves.' The report recommended that the Insolvency Service consider barring them from accepting directorships in the future.

	The report said that the board had treated suppliers with 'contempt' and had 'abused [its] dominant market position' by making them wait for payment and 'quibbled with invoices to avoid prompt payments'. Carillion's early payment facility was also heavily criticised.		The report said that the board had treated suppliers with 'contempt' and had 'abused [its] dominant market position' by making them wait for payment and 'quibbled with invoices to avoid prompt payments'. Carillion's early payment facility was also heavily criticised.
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	But while the report described the board as 'both responsible and culpable for the company's failure', it also reserved criticism for the 'big four' accountancy firms - PwC, KPMG, Deloitte and EY - accusing them of operating as a 'cosy club'. The report claimed that KPMG had been 'complicit' in signing off the 'increasingly fantastical figures' presented by Carillion, while internal auditor Deloitte had failed to identify, or had 'readily ignored' the 'terminal failings' in risk management and financial controls.		But while the report described the board as 'both responsible and culpable for the company's failure', it also reserved criticism for the 'big four' accountancy firms - PwC, KPMG, Deloitte and EY - accusing them of operating as a 'cosy club'. The report claimed that KPMG had been 'complicit' in signing off the 'increasingly fantastical figures' presented by Carillion, while internal auditor Deloitte had failed to identify, or had 'readily ignored' the 'terminal failings' in risk management and financial controls.

−	The report recommended that the competition regulator consider whether the 'big four' should be forcibly broken up to increase competition. In addition, there ~~was~~ calls for a government investigation and overhaul of the corporate culture, warning that without governance reforms 'Carillion could happen again, and soon'.	+	The report recommended that the competition regulator consider whether the 'big four' should be forcibly broken up to increase competition. In addition, there were calls for a government investigation and overhaul of the corporate culture, warning that without governance reforms 'Carillion could happen again, and soon'.
−		+
−	~~The government must formally respond to the report within two months.~~	+
−		+
−	~~You can read the report [https://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/news-parliament-2017/carillion-report-published-17-19/ here]~~.	+

	=== Crown representatives ===		=== Crown representatives ===

−	On 30th May 2018, the chairs of the two committees that published the joint report sent a follow-up letter to the Cabinet Office recommending that the role and responsibilities of ~~[[Crown_Representative\|~~crown representatives]] should be overhauled.	+	On 30th May 2018, the chairs of the two committees that published the joint report sent a follow-up letter to the Cabinet Office recommending that the role and responsibilities of crown representatives should be overhauled.

−	Frank Field and Rachel Reeves wrote that the government's system of having ~~[[Crown_Representative\|~~crown representatives]] in the Cabinet Office to monitor the performance of contractors should be urgently reviewed to ensure that issues relating to other strategic suppliers ~~can~~ be detected and dealt with much earlier than they were in the case of Carillion.	+	Frank Field and Rachel Reeves wrote that the government's system of having crown representatives in the Cabinet Office to monitor the performance of contractors should be urgently reviewed to ensure that issues relating to other strategic suppliers could be detected and dealt with much earlier than they were in the case of Carillion.

−	~~Regarding the role~~ of [[Crown_Representative\|crown ~~representatives~~]], the ~~final report concluded:~~	+	The final report concluded: 'The assignment of a [[Crown_Representative\|crown representative]] to Carillion served no noticeable purpose in alerting the government to potential issues in advance of company’s July 2017 profit warning. The absence of one between August and November 2017 cannot have increased the Government’s ability to keep itself informed of the direction of the company during a critical period before its collapse. This review should consider whether devoting more resources to liaison with strategic suppliers would offer better value for the taxpayer.'

−	'The assignment of a [[Crown_Representative\|crown representative]] to Carillion served no noticeable purpose in alerting the government to potential issues in advance of company’s July 2017 profit warning. The absence of one between August and November 2017 cannot have increased the Government’s ability to keep itself informed of the direction of the company during a critical period before its collapse. This review should consider whether devoting more resources to liaison with strategic suppliers would offer better value for the taxpayer.'	+	In their follow-up letter, the chairs enquired about the failure of the system to respond to the problems faced by Carillion: 'the September 2016 assessment is still quoting Carillion’s total revenue figure from the 2014 accounts despite the 2015 accounts having been published back in March 2016. Is this an isolated case or are all strategic supplier risk assessments based on out-of-date financial data?'
−		+
−	In their follow-up letter, the chairs enquired about the failure of the system to respond to the problems faced by Carillion - 'the September 2016 assessment is still quoting Carillion’s total revenue figure from the 2014 accounts despite the 2015 accounts having been published back in March 2016. Is this an isolated case or are all strategic supplier risk assessments based on out-of-date financial data?'	+

	== June 2018 ==		== June 2018 ==
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	On 9 July 2018, the Public Administration and Constitutional Affairs Committee (PACAC) published its inquiry into Carillion's insolvency. The committee of cross-party backbench MPs were damning about the government's focus on lowest price tenders and warned that it could happen again unless lessons are learned.		On 9 July 2018, the Public Administration and Constitutional Affairs Committee (PACAC) published its inquiry into Carillion's insolvency. The committee of cross-party backbench MPs were damning about the government's focus on lowest price tenders and warned that it could happen again unless lessons are learned.

−	[https://www.parliament.uk/business/committees/committees-a-z/commons-select/public-administration-and-constitutional-affairs-committee/news-parliament-2017/carillion-outsourcing-report-published-17-19/ After Carillion: Public Sector Outsourcing and Contracting], concluded that the government was right to allow the failure of Carillion, but that there ~~needs~~ to be a re-think about how projects and services are procured. It said; '[the] government’s overriding priority for outsourcing is spending as little money as possible while forcing contractors to take unacceptable levels of financial risk.'	+	[https://www.parliament.uk/business/committees/committees-a-z/commons-select/public-administration-and-constitutional-affairs-committee/news-parliament-2017/carillion-outsourcing-report-published-17-19/ After Carillion: Public Sector Outsourcing and Contracting], concluded that the government was right to allow the failure of Carillion, but that there needed to be a re-think about how projects and services are procured. It said; '[the] government’s overriding priority for outsourcing is spending as little money as possible while forcing contractors to take unacceptable levels of financial risk.'

	It also criticised private finance initiatives (PFI), stating; '...it is unacceptable that almost 30 years after the first PFI projects were initiated, the Treasury cannot produce an evidence base to support its claims that PFI is worthwhile for any reason apart from the fact that it takes debt off balance sheet.'		It also criticised private finance initiatives (PFI), stating; '...it is unacceptable that almost 30 years after the first PFI projects were initiated, the Treasury cannot produce an evidence base to support its claims that PFI is worthwhile for any reason apart from the fact that it takes debt off balance sheet.'
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	== September 2018 ==		== September 2018 ==

−	Despite assurances from ministers earlier in 2018 that taxpayers' money would not be used to help pay for Carillion's collapse, a Freedom of Information request made by the construction union Unite ~~has~~ found differently.	+	Despite assurances from ministers earlier in 2018 that taxpayers' money would not be used to help pay for Carillion's collapse, a Freedom of Information request made by the construction union Unite found differently. According to details released, the Redundancy Payments Office (RPO) made around £50m in redundancy payments to Carillion workers, with the final bill likely to be around £65m.
−		+
−	According to ~~new~~ details released, the Redundancy Payments Office (RPO) ~~has already~~ made around £50m in redundancy payments to Carillion workers, with the final bill likely to be around £65m.	+

−	In addition, it is expected that taxpayers ~~will~~ have to pay the £50m bill for accountancy firm PwC who were hired by the Insolvency Service to break up Carillion. The completion of several Carillion projects such as the Midlands Metropolitan Hospital and the Royal Liverpool University Hospital could also be borne by the taxpayer, at a cost of more than £100m, according to Unite.	+	In addition, it was expected that taxpayers would have to pay the £50m bill for accountancy firm PwC who were hired by the Insolvency Service to break up Carillion. The completion of several Carillion projects such as the Midlands Metropolitan Hospital and the Royal Liverpool University Hospital could also be borne by the taxpayer, at a cost of more than £100m, according to Unite.

	Unite assistant general secretary Gail Cartmail said, “...while the directors and senior executives of Carillion have largely slithered off into lucrative new roles it is the taxpayers who have been left to pick up the pieces from their mess”.		Unite assistant general secretary Gail Cartmail said, “...while the directors and senior executives of Carillion have largely slithered off into lucrative new roles it is the taxpayers who have been left to pick up the pieces from their mess”.

Designing Buildings at 09:37, 14 January 2021

2021-01-14T09:37:00Z

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	On 16 January, Business Secretary Greg Clark confirmed he had asked the Insolvency Service to fast-track an investigation into Carillion’s directors and to broaden the scope to include previously-employed directors. He also wrote to the Financial Reporting Council (FRC), asking it to conduct an investigation into the preparation of Carillion’s accounts, as well as the company’s auditors. (Ref. [https://www.gov.uk/government/news/business-secretary-outlines-departmental-action-following-carillion-liquidation https://www.gov.uk/government/news/business-secretary-outlines-departmental-action-following-carillion-liquidation])		On 16 January, Business Secretary Greg Clark confirmed he had asked the Insolvency Service to fast-track an investigation into Carillion’s directors and to broaden the scope to include previously-employed directors. He also wrote to the Financial Reporting Council (FRC), asking it to conduct an investigation into the preparation of Carillion’s accounts, as well as the company’s auditors. (Ref. [https://www.gov.uk/government/news/business-secretary-outlines-departmental-action-following-carillion-liquidation https://www.gov.uk/government/news/business-secretary-outlines-departmental-action-following-carillion-liquidation])

−	On 16 January, Carillion Canada, which employs 6,000 people released a statement clarifying that; "...Carillion's Canadian operations are not in liquidation and continue uninterrupted. Our employees, subcontractors and suppliers in Canada continue to be paid and we remain committed to delivering safe, quality services for our clients. Our Canadian leadership is currently assessing the situation and working with stakeholders to ensure continuity of operations."	+	Also on 16 January, Carillion Canada, which employs 6,000 people released a statement clarifying that; "...Carillion's Canadian operations are not in liquidation and continue uninterrupted. Our employees, subcontractors and suppliers in Canada continue to be paid and we remain committed to delivering safe, quality services for our clients. Our Canadian leadership is currently assessing the situation and working with stakeholders to ensure continuity of operations."

−	On 17 January, it was announced that Lloyds Banking Group, HSBC and RBS had set up ~~finds~~ totalling £225m to help Carillion subcontractors, and that they would waive fees and suspend loan repayments where necessary. (Ref. [https://www.gov.uk/government/news/business-secretary-welcomes-action-by-banks-to-support-small-businesses-affected-by-carillion https://www.gov.uk/government/news/business-secretary-welcomes-action-by-banks-to-support-small-businesses-affected-by-carillion])	+	On 17 January, it was announced that Lloyds Banking Group, HSBC and RBS had set up funds totalling £225m to help Carillion subcontractors, and that they would waive fees and suspend loan repayments where necessary. (Ref. [https://www.gov.uk/government/news/business-secretary-welcomes-action-by-banks-to-support-small-businesses-affected-by-carillion https://www.gov.uk/government/news/business-secretary-welcomes-action-by-banks-to-support-small-businesses-affected-by-carillion])

−	On 18 January, the Business Secretary Greg Clark chaired a new taskforce ~~which was~~ set up to monitor and advise on mitigating the impacts of Carillion’s liquidation on construction firms, particularly SMEs ~~and those working in the sector~~. The taskforce’s attendees included representatives from leading business bodies, the construction trade sector, unions, banks and government.	+	On 18 January, the Business Secretary Greg Clark chaired a new taskforce set up to monitor and advise on mitigating the impacts of Carillion’s liquidation on construction firms, particularly SMEs. The taskforce’s attendees included representatives from leading business bodies, the construction trade sector, unions, banks and government. The taskforce was intended to be a means to collaborate and ensure the impact on the firm’s employees in the private, as well as public, sector was minimised and to help them recover. (Ref. [https://www.gov.uk/government/news/business-secretary-chairs-first-taskforce-to-support-small-businesses-and-workers-affected-by-carillion-insolvency https://www.gov.uk/government/news/business-secretary-chairs-first-taskforce-to-support-small-businesses-and-workers-affected-by-carillion-insolvency])
−		+
−	The taskforce ~~will act as~~ a means to collaborate and ensure the impact ~~of the Carillion insolvency~~ on the firm’s employees in the private, as well as public, sector is minimised and to help them recover. (Ref. [https://www.gov.uk/government/news/business-secretary-chairs-first-taskforce-to-support-small-businesses-and-workers-affected-by-carillion-insolvency https://www.gov.uk/government/news/business-secretary-chairs-first-taskforce-to-support-small-businesses-and-workers-affected-by-carillion-insolvency])	+

	== February 2018 ==		== February 2018 ==
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	=== Jobs ===		=== Jobs ===

−	On the 2nd February 2018, the Official Receiver said that more than 919 jobs ~~have~~ been saved, but that 377 more have been made redundant ~~and are now being told to contact the JobCentre~~. Those whose jobs ~~have~~ been saved ~~are~~ being transferred to new employers who ~~have~~ taken on ~~the~~ infrastructure, central and local government, and construction contracts.	+	On the 2nd February 2018, the Official Receiver said that more than 919 jobs had been saved, but that 377 more have been made redundant. Those whose jobs had been saved were being transferred to new employers who had taken on infrastructure, central and local government, and construction contracts.
−		+
−	~~Regarding the remaining Carillion staff employed in the UK, of which there were almost 20,000, a spokesperson for the Official Receiver said:~~	+

−	“I am expecting many employees working on other Carillion contracts to transfer in the coming weeks and we are continuing to keep the workforce updated as these are arrangements are finalised.”	+	Regarding the remaining Carillion staff employed in the UK, of which there were almost 20,000, a spokesperson for the Official Receiver said: “I am expecting many employees working on other Carillion contracts to transfer in the coming weeks and we are continuing to keep the workforce updated as these are arrangements are finalised.”

	On 5 February 2018, it was announced that a further 452 employees had been made redundant, whilst a further 100 employees jobs have been saved.		On 5 February 2018, it was announced that a further 452 employees had been made redundant, whilst a further 100 employees jobs have been saved.
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	On 8 February 2018, the Official Receiver, announced it had safeguarded a further 1,221 jobs but that an additional 101 employees had been made redundant.		On 8 February 2018, the Official Receiver, announced it had safeguarded a further 1,221 jobs but that an additional 101 employees had been made redundant.

−	On 20 February 2018, a fresh round of 152 job-cuts took the total number of redundancies to 1,141. The Official Receiver also confirmed that 7,610 jobs ~~have~~ been saved, most from support services. Meanwhile, legal firm Clifford Chance purchased Carillion Advice Services, set up in 2011 as a stand-alone business to support Carillion’s in-house legal team.	+	On 20 February 2018, a fresh round of 152 job-cuts took the total number of redundancies to 1,141. The Official Receiver also confirmed that 7,610 jobs had been saved, most from support services. Meanwhile, legal firm Clifford Chance purchased Carillion Advice Services, set up in 2011 as a stand-alone business to support Carillion’s in-house legal team.

	On 27 February 2018, the Official Receiver confirmed a further 230 redundancies, taking the total to 1,371. There were criticisms from employees for the lack of organisation and information, claiming that the announcement was posted on the Receiver's website in advance of staff being told directly.		On 27 February 2018, the Official Receiver confirmed a further 230 redundancies, taking the total to 1,371. There were criticisms from employees for the lack of organisation and information, claiming that the announcement was posted on the Receiver's website in advance of staff being told directly.

−	On 8 March 2018, the Canadian facilities management (FM) and real estate group Brookfield Global Integrated Solutions (BGIS) announced that the deal to buy FM contracts was off because 'certain closing conditions have not been met'.	+	On 8 March 2018, the Canadian facilities management (FM) and real estate group Brookfield Global Integrated Solutions (BGIS) announced that the deal to buy FM contracts was off because 'certain closing conditions have not been met'. BGIS did not expand on what those closing conditions were, but it is believed that they involve guarantees of continued business.
−		+
−	~~The surprise about-turn, rejecting contracts serving hospitals, prisons, schools, transport and emergency services, could result in the loss of a further 2,500 jobs~~. BGIS did not expand on what those closing conditions were, but it is believed that they involve guarantees of continued business.	+

	=== Inquiry ===		=== Inquiry ===
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	On 6 February 2018, a joint inquiry by two Commons select committees held its first session, with evidence provided to MPs from seven former Carillion directors.		On 6 February 2018, a joint inquiry by two Commons select committees held its first session, with evidence provided to MPs from seven former Carillion directors.

−	Reflecting on how Carillion's debts ~~amounted~~ along with its pension deficit, the Work and Pensions Committee chair Frank Field accused the former finance director Zafar Khan of being "asleep at the wheel". Khan denied the accusation.	+	Reflecting on how Carillion's debts mounted along with its pension deficit, the Work and Pensions Committee chair Frank Field accused the former finance director Zafar Khan of being "asleep at the wheel". Khan denied the accusation.

	Keith Cochrane, who was appointed interim Chief Executive after the group issued its July 2017 profit warning, conceded that if they had suspended shareholder dividends it "would have made a difference, possibly". But he denied prioritising the interests of shareholders above those of the 27,000 pension scheme members.		Keith Cochrane, who was appointed interim Chief Executive after the group issued its July 2017 profit warning, conceded that if they had suspended shareholder dividends it "would have made a difference, possibly". But he denied prioritising the interests of shareholders above those of the 27,000 pension scheme members.

−	Regarding whether the board should have done more to raise flags about Carillion's position, Cochrane said; “Clearly with the benefit of hindsight, should the board have been asking further, more probing questions, perhaps... Clearly the business did have issues. Do I wish we’d done something about it sooner, absolutely. At the time, all the decisions I took were seeking to do the best thing for the business.”	+	Regarding whether the board should have done more to raise red flags about Carillion's position, Cochrane said; “Clearly with the benefit of hindsight, should the board have been asking further, more probing questions, perhaps... Clearly the business did have issues. Do I wish we’d done something about it sooner, absolutely. At the time, all the decisions I took were seeking to do the best thing for the business.”

−	On 28 February 2018, the minutes from Carillion's board meetings revealed that former chairman Philip Green had been planning an 'upbeat announcement' to the City of London just five days before unveiling a write-down of £845m. In addition, the board had rejected advice from brokers that emergency funds would not be able to be raised. The board dismissed the advice as 'not credible' before hiring alternative advisers.	+	On 28 February 2018, the minutes from Carillion's board meetings revealed that former chairman Philip Green had been planning an 'upbeat announcement' to the City of London just five days before unveiling a write-down of £845m. In addition, the board had rejected advice from brokers that emergency funds would not be able to be raised. The board dismissed the advice as 'not credible' before hiring alternative advisers. In response, Frank Field, the chair of the work and pensions committee, said: “Carillion’s chair appeared to lack even a tenuous grasp on the reality of the company’s situation ... It is difficult to believe the chairman of the company was unaware of its position, but equally difficult to comprehend his assessment if he was.”
−		+
−	In response, Frank Field, the chair of the work and pensions committee, said: “Carillion’s chair appeared to lack even a tenuous grasp on the reality of the company’s situation ... It is difficult to believe the chairman of the company was unaware of its position, but equally difficult to comprehend his assessment if he was.”	+

	=== Claims ===		=== Claims ===
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	Field said that, “then, when Carillion finally collapsed, PwC adroitly re-emerged as butcher, packaging up joints of the fallen beast to be flogged off. For this they are handsomely rewarded by the taxpayer. They claim to be experts in every aspect of company management. They’re certainly experts in ensuring they get their cut at every stage.”		Field said that, “then, when Carillion finally collapsed, PwC adroitly re-emerged as butcher, packaging up joints of the fallen beast to be flogged off. For this they are handsomely rewarded by the taxpayer. They claim to be experts in every aspect of company management. They’re certainly experts in ensuring they get their cut at every stage.”

−	The Pensions Regulator (TPR), the watchdog that oversees UK work-based pension schemes, ~~has~~ also ~~come~~ under fire from MPs, who criticised its “weak position” in its dealings with Carillion.	+	The Pensions Regulator (TPR), the watchdog that oversees UK work-based pension schemes, also ca me under fire from MPs, who criticised its “weak position” in its dealings with Carillion.

	=== Bonuses ===		=== Bonuses ===
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	The joint committee inquiry investigating Carillion's collapse published new evidence in March illustrating the extent to which the company safeguarded the bonus rewards for its top executives.		The joint committee inquiry investigating Carillion's collapse published new evidence in March illustrating the extent to which the company safeguarded the bonus rewards for its top executives.

−	After his contract was terminated, the share-related bonuses for former-CEO Richard Howson were to be deposited into an account that would not have to be disclosed to shareholders. In addition, senior staff were awarded retention bonuses and salary increases in an attempt to prevent multiple resignations following the first shock profit warning ~~being issued~~. The contracts of senior staff were also written in such a way as to make it difficult to claim back bonuses for any wrongdoing.	+	After his contract was terminated, the share-related bonuses for former-CEO Richard Howson were to be deposited into an account that would not have to be disclosed to shareholders. In addition, senior staff were awarded retention bonuses and salary increases in an attempt to prevent multiple resignations following the first shock profit warning. The contracts of senior staff were also written in such a way as to make it difficult to claim back bonuses for any wrongdoing.

	The inquiry also found that Carillion's board had tried to increase the maximum bonus level to 150%, although resistance forced the percentage back down to 100%.		The inquiry also found that Carillion's board had tried to increase the maximum bonus level to 150%, although resistance forced the percentage back down to 100%.
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	=== Jobs ===		=== Jobs ===

−	An Official Receiver update reported that nearly 10,000 former Carillion employees ~~have~~ managed to obtain new secure employment through the transfer of contracts. That ~~accounts~~ for ~~more than half (~~54%) of the pre-liquidation workforce. However, there ~~have~~ been approximately 1,800 redundancies.	+	An Official Receiver update reported that nearly 10,000 former Carillion employees had managed to obtain new secure employment through the transfer of contracts. That accounted for 54% of the pre-liquidation workforce. However, there had been approximately 1,800 redundancies. These figures excluded those jobs which were attached to contracts where an intention to purchase had been entered into but had not yet formerly occurred.
−		+
−	These figures ~~exclude~~ those jobs which ~~are~~ attached to contracts where an intention to purchase ~~has~~ been entered into but ~~has~~ not yet formerly occurred.	+

	=== Liabilities ===		=== Liabilities ===

−	On 16th April 2018, the Official Receiver revealed that, when it collapsed, Carillion's construction arm had liabilities that were far higher than had been previously thought.	+	On 16th April 2018, the Official Receiver revealed that, when it collapsed, Carillion's construction arm had liabilities that were far higher than had been previously thought. Accounts had previously claimed liabilities of £2 billion at the end of 2016. However, a letter from the Official Receiver estimated that total liabilities could be as high as nearly £7bn.
−		+
−	Accounts had previously claimed liabilities of £2 billion at the end of 2016. However, a letter from the Official Receiver estimated that total liabilities could be as high as nearly £7bn.	+
−		+
−	This could mean that banks, pension funds and subcontractors who were owed money by Carillion at the time of the firm's collapse may struggle to recoup the amounts owed. Assets that are due to be sold are expected to only realise a fraction of the firm's total liabilities.	+

	== May 2018 ==		== May 2018 ==

Designing Buildings at 09:26, 14 January 2021

2021-01-14T09:26:58Z

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	= Overview =		= Overview =

−	On 15 January 2018, a winding up order was made against integrated support services business Carillion Plc and the Official Receiver was appointed by the court as the liquidator. PwC ~~will act~~ on behalf of the Official Receiver, and ~~they have~~ set up a website to provide more information as it ~~becomes~~ available: [https://www.pwc.co.uk/carillion https://www.pwc.co.uk/carillion].	+	On 15 January 2018, a winding up order was made against integrated support services business Carillion Plc and the Official Receiver was appointed by the court as the liquidator. PwC acted on behalf of the Official Receiver, and set up a website to provide more information as it became available: [https://www.pwc.co.uk/carillion https://www.pwc.co.uk/carillion].

−	A web page ~~has~~ also ~~been~~ set up by the Insolvency Service for those affected: [https://www.gov.uk/government/news/carillion-declares-insolvency-information-for-employees-creditors-and-suppliers https://www.gov.uk/government/news/carillion-declares-insolvency-information-for-employees-creditors-and-suppliers]	+	A web page was also set up by the Insolvency Service for those affected: [https://www.gov.uk/government/news/carillion-declares-insolvency-information-for-employees-creditors-and-suppliers https://www.gov.uk/government/news/carillion-declares-insolvency-information-for-employees-creditors-and-suppliers]

−	Carillion ~~employs~~ 43,000 people, operating in the UK, Canada and Middle East, and ~~has~~ annual revenues of more than £5bn. It ~~offers~~ support services, project finance and construction, working in a number of key business segments:	+	Carillion employed 43,000 people, operating in the UK, Canada and Middle East, and had annual revenues of more than £5bn. It offered support services, project finance and construction, working in a number of key business segments:

	* Facilities management.		* Facilities management.
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	* Construction services, including; consultancy, building, civil engineering and development.		* Construction services, including; consultancy, building, civil engineering and development.

−	Carillion was established in 1999 by the separation of the Tarmac Group into Tarmac, a materials company, and Carillion, a support and construction services company. Carillion went on to acquire Mowlem in 2006, Alfred McAlpine and Vanbots in 2008 and Eaga in 2011.	+	Carillion was established in 1999 by the separation of the Tarmac Group into Tarmac, a materials company, and Carillion, a support and construction services company. Carillion went on to acquire Mowlem in 2006, Alfred McAlpine and Vanbots in 2008 and Eaga in 2011. Projects Carillion was involved in that included the HS2 high-speed rail line, and the management of schools and prisons.

−	However, the company made a pre-tax loss of £1.1bn in the first half of 2017 and ~~owes~~ £900m to RBS, Barclays, HSBC, Lloyds and Santander. It also ~~has~~ a £600m pension deficit. Discussions about a rescue package failed to reach agreement to save the company. PwC stated that; 'unfortunately, as a result of the liquidation appointments, there is no prospect of any return to shareholders'.	+	However, the company made a pre-tax loss of £1.1bn in the first half of 2017 and owed £900m to RBS, Barclays, HSBC, Lloyds and Santander. It also had a £600m pension deficit. Discussions about a rescue package failed to reach agreement to save the company. PwC stated that; 'unfortunately, as a result of the liquidation appointments, there is no prospect of any return to shareholders'.
−		+
−	~~Employees, agents and subcontractors are being asked to continue to work as normal, and PwC have confirmed they will be paid for the work they do during the liquidation.~~	+
−		+
−	Projects Carillion is involved in that will cause concern to the government include the HS2 high-speed rail line, and the management of schools and prisons. It has been suggested that some of these contracts could be taken on by other companies, and some might be taken under government control, with the government already having committed to provide funding to maintain public services run by Carillion.	+

	Chairman of Carillion, Philip Green said: “Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future... In recent days however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision. We understand that HM Government will be providing the necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff, subcontractors and suppliers.”		Chairman of Carillion, Philip Green said: “Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future... In recent days however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision. We understand that HM Government will be providing the necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff, subcontractors and suppliers.”

−	~~However, the~~ Labour Party ~~has~~ asked whether proper due diligence was carried out before £2bn of contracts were awarded to Carillion, which ~~has~~ been known to be in financial difficulties for some time, It issued its first profit warning in July 2017. A week later, it was part of a joint venture awarded a £1.4bn contract for HS2. Further profit warnings were issued by the company in September and November 2017.	+	The Labour Party asked whether proper due diligence was carried out before £2bn of contracts were awarded to Carillion, which had been known to be in financial difficulties for some time. It issued its first profit warning in July 2017. A week later, it was part of a joint venture awarded a £1.4bn contract for HS2. Further profit warnings were issued by the company in September and November 2017.

	Shadow Cabinet Office minister, Jon Trickett said; “Alarm bells have been ringing for over six months about the state of Carillion’s finances, so the government must come forward and answer questions on exactly what due diligence measures were undertaken before awarding contracts to Carillion worth billions of taxpayers’ money.”		Shadow Cabinet Office minister, Jon Trickett said; “Alarm bells have been ringing for over six months about the state of Carillion’s finances, so the government must come forward and answer questions on exactly what due diligence measures were undertaken before awarding contracts to Carillion worth billions of taxpayers’ money.”
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	It was later reported that by 15 January, Carillion's remaining funds stood at just £29 million, giving it insufficient cash to appoint an administrator.		It was later reported that by 15 January, Carillion's remaining funds stood at just £29 million, giving it insufficient cash to appoint an administrator.

−	In the immediate aftermath of Carillion's collapse, concerns ~~have been~~ raised about the number of suppliers and other small businesses who may face bankruptcy. In 2016, Carillion spent £952m with local suppliers and an extensive network of SMEs, with Build UK estimating that 25,000-30,000 firms could be awaiting payment.	+	In the immediate aftermath of Carillion's collapse, concerns were raised about the number of suppliers and other small businesses who may face knock-on bankruptcy. In 2016, Carillion spent £952m with local suppliers and an extensive network of SMEs, with Build UK estimating that 25,000-30,000 firms could be awaiting payment. Build UK highlighted that when previously big contractors had failed, the rate of businesses that did not survive the next five years if they were owed money was around 18%.
−		+
−	Build UK highlighted that when previously big contractors ~~have~~ failed, the rate of businesses that did not survive the next five years if they were owed money was around 18%.	+

	In the Commons, Cabinet Office minister David Lidington was forced to defend the government against accusations of a lack of oversight in awarding Carillion further public sector contracts despite profit warnings. Mr Lidington said that the government would pay employees and small businesses working on the firm's public contracts, however, companies working on private projects would only receive a 48-hour 'grace period'.		In the Commons, Cabinet Office minister David Lidington was forced to defend the government against accusations of a lack of oversight in awarding Carillion further public sector contracts despite profit warnings. Mr Lidington said that the government would pay employees and small businesses working on the firm's public contracts, however, companies working on private projects would only receive a 48-hour 'grace period'.

Designing Buildings at 09:19, 14 January 2021

2021-01-14T09:19:38Z

← Older revision		Revision as of 09:19, 14 January 2021
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	In February 2019, the Financial Reporting Council confirmed that its investigation would go back to 2013, adding a further year to the length of its work.		In February 2019, the Financial Reporting Council confirmed that its investigation would go back to 2013, adding a further year to the length of its work.

−	= 2020 =	+	== 2020 ==

	In November 2020, The Financial Conduct Authority released a warning notice stating that financial announcements made by Carillion before the collapse; '...were misleading and did not accurately or fully disclose the true financial performance of Carillion.'		In November 2020, The Financial Conduct Authority released a warning notice stating that financial announcements made by Carillion before the collapse; '...were misleading and did not accurately or fully disclose the true financial performance of Carillion.'
		+
		+	== 2021 ==
		+
		+	In January 2021, business secretary Kwasi Kwarteng launched legal action against eight former directors of Carillion to prevent them from becoming directors of companies.

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