January 24, 2018 / 10:58 AM / 3 months ago

MPs to question Carillion directors over collapse

LONDON (Reuters) - British lawmakers will question the directors of Carillion to find out how the major construction and outsourcing company went bust under a mountain of debt, leaving hundreds of millions of pounds of unfinished public contracts.

A worker walks past a logo on the door of the site office at a Carillion construction site in central London, Britain, January 16, 2018. REUTERS/Simon Dawson

The company, which was building roads and hospitals and running a host of public services, collapsed on Jan. 15 under the weight of at least 2.2 billion pounds in debt and pension liabilities.

Carillion’s former chief executive Richard Howson, who stood down after a profit warning in July, interim chief executive Keith Cochrane and chairman Philip Green have been called to give evidence, two committees of lawmakers said on Wednesday.

The Work and Pensions and BEIS (Business, Energy and Industrial Strategy) said they would investigate how a company that auditor KPMG said was a going concern less than a year ago could crash into liquidation with huge liabilities earlier this month.

“The particularly nasty twist in this now grimly familiar tale is the mountain of debt and giant pension deficit this public services contractor leaves in the wreckage of its collapse – with an accompanying massive hit to the public purse,” said Work and Pensions Select Committee chair Frank Field.

The committees will question the Financial Reporting Council and the Insolvency Service on Tuesday, Jan. 30, before moving on to the directors, including the company’s former finance directors, Richard Adam and Zafar Khan, on Feb. 6.

Reporting by Paul Sandle; editing by Kate Holton

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