Carillion directors, auditors to be investigated

UK Business Secretary Greg Clark has asked Insolvency Service to fast-track an investigation into Carillion’s directors and broaden scope to include those directors previously employed.

Auditors and the accounts of the company, which went into liquidation yesterday, will also be investigated.

It raises the prospect of former chief executive Richard Howson (pictured above), being investigated, among others, as the Official Receiver considers whether those who are, or were previously directors of the company may have caused detriment to those owed money, including workers and businesses affected, the government announced today.

UK business secretary Greg Clark (Wikimedia Commons)

Howson stepped down on 10 July last year when Carillion made the shocking revelation that it had to set aside £845m to cover problem contracts at home and abroad.

Alongside this, the Business Secretary has also written to the chairman of the Financial Reporting Council (FRC), Sir Win Bischoff, and asked it to conduct an investigation into the preparation of Carillion’s accounts past and present, as well as the company’s auditors.

"It is important we quickly get the full picture of the events which caused Carillion to enter liquidation, which is why I have asked the Insolvency Service to fast-track and broaden the scope of the Official Receiver’s investigation," Greg Clark said.

"In particular, I have asked that the investigation looks not only at the conduct of the directors at the point of its insolvency, but also of any individuals who were previously directors. Any evidence of misconduct will be taken very seriously."

Meanwhile, yesterday Clark chaired a meeting with leading business and construction trade bodies, representing Carillion’s sub-contractors including representatives from the construction sector, including: Build U, the Civil Engineering Contractors Association, the British Constructional Steelwork Association, the Building Engineering Services Association, the Federation of Master Builders, the Construction Products Association, the Electrical Contractors’ Association, and the Specialist Engineering Contractors Group.

Also invited were representatives of leading business bodies with the Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC) and the Institute of Directors (IOD).

Later today, the Business Secretary will meet the General Secretaries of the TUC and Unite, Frances O’Grady and Len McCluskey, to discuss the impact on employees affected by Carillion’s insolvency.

The department has also outlined the resources open to those workers and businesses affected by Carillion’s liquidation who are seeking further information, including:

  • A web page set up by the Insolvency Service for those affected and seeking advice;
  • A dedicated website set up by the Special Managers, PWC, as well as a dedicated helpline – 0800 063 9282;
  • A hotline set up for any employee worried about their pension situation on these specific pension schemes – 020 7630 2715.

Top image: Richard Howson stepped down as chief executive on 10 July last year when Carillion made the shocking revelation (Carillion)

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