5 February 2018 | Herpreet Kaur Grewal
Carillion bosses will assemble before a parliamentary committee tomorrow (Tuesday) to discuss the company's management and governance following its dramatic collapse last month.
The Work and Pensions and BEIS Committees have launched the joint inquiry to investigate how the company has left "a mountain of debt, potential job losses in the thousands, a giant pension deficit and hundreds of millions of pounds of unfinished public contracts with vast ongoing costs to the UK taxpayer".
The committees will be investigating how a company that was signed off by KPMG as a going concern in spring 2017 could crash into liquidation with a reported £5 billion of liabilities and just £29 million left in cash less than a year later.
Those being questioned will include: Keith Cochrane, Carillion's interim chief executive; Emma Mercer, Carillion's finance director, and former finance directors Zafar Khan and Richard Adam; Phillip Green CBE, Carillion chairman; Alison Horner, chair of Carillion's remuneration committee, and Richard Howson, its former CEO.
The witnesses will be questioned on the foreseeability of collapse, their accounting practices, risky contracts, levels of borrowing, dividends, salary and bonus payouts - and the huge pension deficit, which increased massively over a 10-year period while the company treated its obligations to multiple pension schemes as subordinate to all other calls on the business.
Separately, a spokesman for the official receiver said Carillion would be making 452 posts redundant. A spokesman confirmed to FM World that none of these roles were facilities management roles.
The spokesman said: "As part of the ongoing liquidation of the Carillion group, we have reviewed additional public and private sector contracts, as well as core divisions of the business.
"We can confirm that we have safeguarded a further 100 jobs and these roles are linked to public sector contracts. Most staff will be transferring on existing or similar terms, something I will continue to facilitate wherever possible as we work to find new providers for Carillion's remaining contracts.
"Unfortunately, 452 posts are being made redundant. They cover a variety of roles connected with private and public contracts across different parts of the country, as well as back-office functions.
"We appreciate this will be a difficult time for those who have lost their jobs. Jobcentre Plus's Rapid Response Service stands ready to support any of these employees by providing advice and information so people can move into a new job as quickly as possible. People who have been made redundant will also be entitled to make a claim for statutory redundancy payments.
"Our efforts are focused on the smooth transfer of Carillion's contracts to new providers and we will continue to keep Carillion's workforce updated as these arrangements are finalised."