Government orders fast-track probe into behaviour of bosses at failed Carillion
3 min read
Business Secretary Greg Clark has ordered a fast-track investigation into the behaviour of bosses past and present at failed construction giant Carillion.
The firm - which held scores of public contracts worth billions of pounds spanning infrastructure and other services - went into liquidation on Monday after failing to secure a rescue package from its lenders.
A probe will be carried out by the Official Receiver into the circumstances which led to the company's collapse.
But in a letter this morning, Mr Clark said the inquiry should be speeded up and, in an unusual move, look at the actions of Carillion's former directors as well as the executives who were in charge when it was liquidated.
In particular, he said the investigation must look at any "detriment" caused to the company's creditors, employees and members of its pension fund.
The minister said: "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.
"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."
The move comes after it emerged that in 2016, Carillion's board of directors introduced new rules making it harder to claw back bonuses from its executives if the company ran into financial trouble.
COLLUSION
Meanwhile, Shadow Chancellor John McDonnell accused ministers of “colluding” with the company despite knowing it was on the brink of collapse, after it emerged eight public sector contracts were awarded to it after it issued profit warnings last July.
In the Commons today, he accused the Government of “drip-feeding” contracts to the ailing firm to keep it afloat.
“When there were loud and clear worrying signs about Carillion, why instead of intervening did Treasury ministers collude in the strategy of drip-feeding more contracts to Carlillion to buoy up an obviously failing company?” he asked.
He added: "There are real suspicions that the Government was too close to this company and too wedded to its privatisation role."
But Chief Secretary to the Treasury Liz Truss said: “The Government is dealing with [this issue] in a responsible measured way rather than making cheap, political shots at a time when people’s jobs are in question.”
Carillion employs some 43,000 staff around the globe including 20,000 in the UK. Thousands of small firms that do work for it also face major pressures if they go unpaid.
Labour leader Jeremy Corbyn yesterday said the collapse of Carillion was a “watershed moment” for the government over its privatisation agenda.
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