Kiltearn Partners, a Scottish investment firm that owned 10% of the now-defunct Carillion, sent evidence to MPs saying it considered suing Carillion following its profits warning last summer.
Thus raising fresh questions about just when Carillion directors knew the company was heading towards collapse.
Investors sent evidence as part of the parliamentary inquiry into Carillion’s collapse. Investors paint a different picture to that drawn by directors giving evidence at the start of the inquiry on 6 February.
Seven former directors blamed the company’s demise primarily on a dispute with joint venture partner Qatar Building company.
Some investors following the company’s profit warning cut their losses while others sought to influence how Carillion was managed.
No inclination to change
Standard Life Aberdeen, for example, first reduced its stake from December 2015 and finally sold its entire holding in July 2017 after meeting with Carillion’s board to raise concerns about its weak cash flow and increasing pension deficit.
The investment company said, “The board showed no inclination to drive the management to change.”
Other investors spoke of trying to meet with Carillion management and being spurned by the contractor. Kilteran Partners said it had considered suing Carillion to recoup losses to for its clients had it not collapsed.
The investment firm said there were “clear ground” to mount an investigation into what executives knew or should have known about slicing £845m in value from key contracts.
Big Four had a feast
MPs have also laid into the big four accountancy firms, PwC, EY, Deloitte and KPMG of “feasting on what was soon to become a carcass”.
Combined the accountancy firms racked up £72m in fees from 2008 up until its collapse. KPMG, in particular, which signed off Carillion’s accounts before its profit warning has come under fire for failing to spot signs.
Rachel Reeves, business select committee chair, said last week, “Either KPMG failed to spot the warning signs, or its judgement was clouded by its cosy relationship with the company and the multimillion pound fees it received.”