Standard Life questioned regarding Carillion sale

LONDON: The UK’s markets regulator will question Standard Life Aberdeen Plc and other asset managers about their decision to sell stakes in Carillion Plc before the construction giant’s demise in January.

The Financial Conduct Authority (FCA) has called in Standard Life – which once had a 10.8% stake in Carillion – for an interview with the meeting to take place in the coming weeks, according to two people with knowledge of the situation.

Other firms have also been asked to answer questions, according to one of the people, who didn’t want to be identified because the FCA request was private.

Carillion, an outsourcing company with contracts in everything from hospitals to the HS2 highspeed rail project, collapsed in January after failing to shore-up finances and get a government bailout. The builder left behind debts of about £1.6bil (US$2.2bil) after a series of construction deals soured.

The failure has prompted a debate in Britain about both how companies are run and the extent to which the government relies on service providers.

Standard Life began selling Carillion shares in December 2015 due to concerns about financial management, strategy and corporate governance, Britain’s largest active money manager told lawmakers’ in writing earlier this year.

The investment company said it raised the concerns with senior executives in regular meetings until it sold its full stake in July 2017.

Executives from Standard Life and BlackRock Inc will be questioned today as part of a separate parliamentary inquiry.

The Work and Pensions Committee and Business, Energy and Industrial Strategy Committee are investigating how Carillion, a company that KPMG LLP said was solvent in spring 2017, could spiral out of control so quickly.