The extensive report published by the Work and Pensions and Business, Energy and Industrial Strategy (BEIS) committees lists conclusions on how Carillion managed to rack up liabilities of almost £7bn and just £29m in cash when it eventually liquidated in early January. The government is not spared attack either for its lack of "decisiveness and bravery" to tackle corporate regulation failures. "This knocks down for good the stance of the Carillion board that whingeing and blaming others can be any defence".
Carillion's mid-January collapse is a "watershed moment" for accountants both big and small, Institute of Chartered Accountants in England & Wales (ICAEW) chief executive Michael Izza said. It employed 43,000 people, about 20,000 of them in the United Kingdom, thousands of whom have lost their jobs.
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MPs investigating the collapse of Carillion have today published their final report into the company's demise with the 100-page report lambasting its board for a "rotten corporate culture" that led to the company's "devastating and hugely costly failure".
The report claims the firm's fall from grace was down to the board's "recklessness, hubris and greed", together with a business model which was nothing more than "a relentless dash for cash, driven by acquisitions, rising debt and exploitation of suppliers" and at best questionable accounting practices that "misrepresented the reality of the business".
"And when we had the directors in front of our Select Committee, they seemed to be in total denial about what happened to their company. They seemed nearly surprised to be in front of us", she said.
Professional services firms have pocketed a total of £71.6m in Carillion-related work since 2008, including on its pension schemes, according to a separate report by the committees.
Obligations such as adequate funding for the pension scheme were, MPs say, "treated with contempt".
They said the directors had presented themselves during parliamentary hearings as "self-pitying victims" of "unforeseeable mishaps".
Former finance director Richard Adam, who was named in the MPs" report as the "architect of Carillion's aggressive accounting policies" said in a statement: "Despite retiring over a year before Carillion went into insolvency, I am deeply saddened by the events that have since overtaken the company.
What are the auditors accused of?
Big Four accountancy firms "waved through" Carillion sign-offs, MPs claimed.
The committee said Ernst & Young was paid £10.8 million for "six months of failed turnaround advice", while Deloitte received £10 million to be Carillion's internal auditor, but were either "unable or unwilling" to identify failings in financial controls, or "too readily ignored them". "However, I reject the unwarranted conclusions the committees have reached concerning my role at the company".
"Our priority has been to keep public services running safely across the country while saving thousands of jobs", said PwC chairman and senior partner Kevin Ellis. "Because if we don't fix this I don't think we're going to have a profession in 20 years time".
Very few of those involved in the scandal escape censure, from the highly paid and "delusional" directors to the even more highly paid "cosy club" of auditors, the timid and ineffective regulators - and the government.
"When swathes of public services are affected, close monitoring of exposure to risks would seem essential", the report said.
The MPs called for the Government to launch an ambitious and wide-ranging overhaul of corporate accountability, finding that successive administrations allowed Carillion to become a giant and unsustainable corporate time bomb.
He added: British industry is too important to be left in the hands of the likes of the shysters at the top of Carillion. Measures taken to improve the business environment, such as the code for prompt payment of suppliers, have proved "wholly ineffective".
'We welcome the report from the joint select committee and will respond fully in due course'.
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