Carillion ‘trampled over rights of pension scheme members’, says Frank Field
Commons committees set to question company executives on collapse and impact for pension scheme members.
Executives from collapsed construction giant Carillion face a tough grilling as they appear before MPs on Tuesday.
A joint hearing of the Commons Business, Energy and Industrial Strategy Committee and the Work and Pensions Committee will examine events leading up to the business failure which has led to the loss of more than 800 jobs.
Ahead of the session, Work and Pensions Committee chairman Frank Field said: “It is clear that the directors of this company trampled over the rights of their tens of thousands of pension scheme members.
“Their main focus was paying out fat dividends and bonuses that exceeded their cash flow, all the while stiffing their suppliers, borrowing mega sums of money, and allowing their liabilities and pension deficit to balloon to ruinous levels.
“Clear warning signs were evident several years ago in the assessments of the company’s commitment to its pension schemes.
“Yet as late as 2015, Richard Adam, one of the directors appearing before us … gave a farcically optimistic report to the pension trustees.”
The two committees published documents from Carillion’s pension covenant assessors, Gazelle Corporate Finance, going back to 2012, which MPs claim “flag up a number of warning signs about the company’s position and illustrate the chronic underfunding of the schemes and the low priority Carillion directors gave their pension obligations”.
The hearings come after a further 452 jobs were lost as a result of the collapse.
The Official Receiver said the jobs cover a variety of roles connected with private and public contracts across the country, as well as back office functions.
The losses are on top of 377 announced on Friday.