Frank Field said inquiry has highlighted issues with corporate accountability

Frank field carillion inquiry

Revelations from the third day of the inquiry into Carillion’s collapse have raised concerns about the effectiveness of the corporate accountability system, according to the co-chair of the committee.

Frank Field (pictured), chair of the work and pensions committee, said evidence provided by the pensions regulator, as well as internal and external auditors Deloitte and KPMG, had provided little comfort about the system.

He said: “We imagined that regulators regulate, and auditors audit. I suppose the employees, suppliers and pensioners of Carillion, and the public, did likewise.

“We were told this morning, however, that these highly paid individuals are mere spectators – commentators at best, certainly not referees - at the mercy of reckless and self-interested directors. 

“I fear it is not only Carillion that is built on sand: it is our whole system of corporate accountability.”

Yesterday, senior figures from the three organisations fronted the inquiry to answer questions on their roles in the company’s collapse.

During the hearing, Field slammed the pensions regulator for its failure to intervene in the Carillion crisis before the construction conglomerate collapsed.

Field questioned the regulator’s chief executive Lesley Titcomb about whether “threatening action” had been the correct plan of action.

Field said: “When you were negotiating with them they were boasting of these mega dividends. Why the hell didn’t you then use your powers?

“They were shovelling money out to themselves, they were shovelling money out to shareholders, why didn’t you get them to actually shovel it the pensioners’ way and particularly… when one of the senior people on the other side said he thought pensions were rubbish.”

Titcomb said: “Regulating in these circumstances isn’t just about using enforcement powers, very often it’s the threat of using those powers that brings people to the table. Difficult decisions were made at the time in terms of the revised offer from the employer and the decision was made to accept it.”

The auditors also came under fire, with questions raised about their knowledge of the cash problems surrounding Carillion’s job in Qatar for Mshireb Properties.

Labour MP Peter Kyle said: “We heard when directors gave evidence here, Mr Howson (former Carillion chief executive Richard Howson) very clearly said that he was owed between £180m and £200m.

“You would have seen the letter this morning from Mshireb Properties. They say in this letter: ‘Mshireb Properties entirely disputes Mr Howson’s statement that Mshireb properties owed Carillion somewhere between £180m and £200m in March 2017. Furthermore, they say ‘in fact, Mshireb Properties consider that Carillion owes Mshireb Properties a similar amount of money’.”

He asked: “Who owed who £200m?”

Peter Meehan, the KPMG audit partner responsible for signing off Carillion’s reports, said: “At March 2017, I don’t know. I signed the December 2016 accounts. I know that my client was owed the £73.9m on the balance sheet at 31 December 2016. They are the accounts I signed.”