Carillion board slammed over "rotten culture" that led to firm's demise

Postado Mai 16, 2018

"Carillion could happen again, and soon", they warn, unless the Government comes up with "radical reforms to our creaking system of corporate accountability".

"What makes this all the more painful is that many of those who bore the brunt of its collapse - its employees, suppliers and other stakeholders - were among those who helped keep company on its feet for as long as it did".

MPs investigating the collapse of Carillion have today published their final report into the company's demise with the 100-page report lambasting its board for a "rotten corporate culture" that led to the company's "devastating and hugely costly failure".

They said the directors had presented themselves during parliamentary hearings as "self-pitying victims" of "unforeseeable mishaps".

The report states that Carillion's rise and spectacular fall was a story of "recklessness, hubris and greed"; its business model "a relentless dash for cash, driven by acquisitions, rising debt and exploitation of suppliers" with at best questionable accounting practices that "misrepresented the reality of the business".

Professional services firms have pocketed a total of £71.6m in Carillion-related work since 2008, including on its pension schemes, according to a separate report by the committees. "Same old greed. A board of directors too busy stuffing their mouths with gold to show any concern for the welfare of their workforce or their pensioners", reported The Guardian.

Field continued: "This is a disgraceful example of how much of our capitalism is allowed to operate, waved through by a cosy club of auditors, conflicted at every turn". "British industry is too important to be left in the hands of the likes of the shysters at the top of Carillion".

Thousands of jobs have been lost as a result of Carillion's collapse in January.

The perception of Carillion as a healthy and successful company was "in no small part due to its directors' determination to increase the dividend paid each year, come what may". "Their colossal failure as managers meant they effectively pressed the self-destruct button on the company".

Deloitte was paid over £10m by the company to act as its internal auditor but MPs conclude they were either unable or unwilling to identify the terminal failings in Carillion's risk management and financial controls, or too readily ignored them.

"The sorry saga of Carillion is further evidence that the Big Four accountancy firms are prioritising their own profits ahead of good governance at the companies they are supposed to be putting under the microscope", she said.

The MPs also said KPMG had failed to question Carillion's financial judgements, while PwC was "continuing to gain" as its official receiver "without adequate scrutiny".

Engineering giant Carillion employed hundreds of support and maintenance staff at Queen Alexandra Hospital until the firm collapsed this year.

"The Government has recognised the weaknesses in the regulatory regimes exposed by Carillion and other corporate failures, but its responses have been cautious, largely technical, and characterised by seemingly endless consultation", the report stated.

Adam's sale of £776,000 shares shortly before Carillion's collapse "were the actions of a man who knew exactly where the company was heading once it was no longer propped up by his accounting tricks", the report says.