UK Edition
Carillion investors mull legal action
Shareholders are exploring legal action against Carillion in the wake of the company’s collapse as pressure mounts on the former directors and its auditor to answer questions about its demise.
A leading litigation fund told The Daily Telegraph that it had fielded calls from shareholders demanding an investigation into the business, amid accusations that its directors had failed to inform shareholders of the extent of its financial trouble.
Such is the low value of Carillion’s assets, shareholders could instead consider taking action against its auditors KPMG, which has faced scrutiny over its signing off of Carillion’s books just 10 months ago.
The Financial Reporting Council (FRC) signalled earlier this week that it is preparing to scrutinise the auditor’s work.
KPMG said: “We believe that we conducted our role as Carillion’s auditor appropriately and responsibly,” adding that it would co-operate fully with any inquiries that were made regarding its actions.
Greg Clark, Business Secretary, today chaired the first meeting of a new taskforce set up by the Government to support small firms affected by Carillion’s collapse.
The task force, which includes members of the construction industry, trade unions and lenders, will “continue to support and monitor the impact on small businesses and employees who have been affected by Carillion’s insolvency”, a spokesman for the Department for Business, Energy and Industrial Strategy said.
A representative from the TUC and Mike Cherry, chairman of the Federation of Small Businesses, were among those who attended the meeting.
Both Lloyds and the Royal Bank of Scotland today announced funds for small businesses impacted by Carillion’s collapse, amounting to £125m and taking the total of financial assistance made available by high street banks to more than £225m.
Meanwhile, Nationwide became the first of Carillion’s major private customers to employ staff affected by the support services firm’s collapse. Around 250 Carillion employees were working for the mutual providing catering and cleaning services, along with a further 1,500 staff who were engaged by separate third-party suppliers to work on Nationwide contracts with Carillion.
Nationwide confirmed that the directly employed workers will be on its payroll from Monday, and it would hire the third-party companies directly rather than via Carillion.
Construction is still largely stalled at Carillion’s largest UK jobs, including the Royal Liverpool Hospital, although a spokesman for the hospital confirmed that workers were back on site.
“Discussions are ongoing between The Hospital Company [the joint venture building the scheme] and subcontractors,” he said. “The hospital will be built but very little construction is happening at the moment, although workers are there.”
At the Midland Metropolitan Hospital in Birmingham, another Carillion project, a spokesman said it was still in discussions with PwC, which is handling the liquidation, and the Government about how the scheme will continue.