MPs criticise Carillion directors for not listening to concerns
Carillion board minutes show the last financial director blew the whistle on accounting irregularities.
MPs have launched fresh attacks against directors of Carillion for not listening to alarms being raised about the state of the company before it collapsed.
New information published by the Work and Pensions and Business Select Committees revealed that Emma Mercer was raising concerns about the accounts she found just six weeks into her job last year as Financial Director of Construction Services.
Minutes of board meetings described her as “whistleblowing”, said the MPs, adding that her revelations threw up serious questions, not least for Carillion’s auditors, KPMG.
These minutes begin to reveal the true picture of a company falling apart at the seams in full view of the board and their auditors Frank Field
Mrs Mercer’s concerns triggered a review of contracts, although the board’s initial decision to have an independent element was later reconsidered.
Frank Field, who chairs the Work and Pensions Committee, said: “Emma Mercer took just six weeks to spot and pull the thread that began the entire company unravelling.
“That the next Chief Financial Officer had to go through whistle blowing procedures to get her concerns about accounting irregularities taken seriously by the Carillion board is extraordinary.
“So too is that the board’s response was to reject an independent review and get KPMG, their pet rubber-stampers, to mark their own homework.
“While our witnesses have been reticent in oral testimony, these minutes begin to reveal the true picture of a company falling apart at the seams in full view of the board and their auditors.”
Rachel Reeves, who chairs the Business, Energy and Industrial Strategy Select Committee, said: “Carillion directors say they couldn’t foresee what investors and company staff could – that spiralling debt problems and failing contracts were destined to sink the company.
“These board minutes point to a very different scenario – Emma Mercer was sounding the alarm but none of the Carillion directors were willing to wake up and listen.”
The committees said the board minutes reveal that Mrs Mercer was blowing the whistle on accounting irregularities.
The committees have launched a joint inquiry into the collapse of Carillion, which has so far led to 1,371 job losses among former employees since the company went into liquidation last month.
The Public Administration and Constitutional Affairs Committee will question former Carillion executives on Tuesday, including chairman Philip Green and chief executives Richard Howson and Keith Cochrane.