Carillion’s auditors set to face grilling from MPs over collapse

THE AUDITORS of Carillion will be quizzed by MPs today over its role in the collapse of the construction giant.

Two select committees will also question Carillion’s internal auditors Deloitte and the Pensions Regulator as part of a joint inquiry into the crisis.

The Work and Pensions, and Business Committees said they had a “growing pile of evidence” that those involved with Carillion, including investors and hedge funds, saw warnings of its demise.

“So why didn’t the auditors?”, said a statement released ahead of today’s hearing. The committee’s statement added: “How did KPMG sign off accounts that had £845m written off their value four months later?” Labour MP for Leeds West, Rachel Reeves, inset, who chairs the Business Committee, said: “Investors spotted that Carillion was heading for disaster and fled. “The company had unsustainably high levels of debt, weak cash-generation and was saddled with a widening pensions deficit. “Carillion’s annual reports were worthless as a guide to the true financial health of the company.

“The fact that it was impossible to get a true sense of the assets, liabilities and cash generation of the business raises serious questions about Carillion’s corporate governance.

“KMPG will have to explain why they signed off on accounts which appear to have borne so little relation to reality.”

More than 1,000 former Carillion workers have lost their jobs since the company went into liquidation last month. The Official Receiver announced that 7,610 jobs have been saved, including 942 following agreements over the past week to buy contracts held by Carillion.