Carillion PLC (CLLN)

[Bouleversee]

Now that KPMG have owned up to fiddling the figures retrospectively, is there any chance of our getting any compensation? I lost quite a lot of money with CLLN's collapse. I think I know the answer, however.

If this is not the correct board for an ex-share, perhaps the Mods could redirect my post.

[Alaric]

Now that KPMG have owned up to fiddling the figures retrospectively,.

Here's a link

https://www.theguardian.com/business/20 ... each-other

[Bouleversee]

Many thanks for that, Alaric. Much better than the article I read in TT which probably wouldn't be accessible to non-subscribers.

[monabri]

I brought this up on the HYP Practical board a couple of days ago.

viewtopic.php?p=471833#p471833

[Bouleversee]

Thanks, Mon. I should have checked there before posting, though it certainly isn't HYP now. I don't look at that board now because I lost rather a lot of money after I was introduced to it and have reverted to total return.

[monabri]

The big C....issue 99...the story rolls on...


https://www.telegraph.co.uk/business/20 ... -collapse/

"Senior accountants at KPMG forged documents in an effort to mislead regulators over botched audits at the collapsed outsourcer Carillion."

"Six staff at the business were found by a tribunal to have created "fabricated" meeting minutes to cover up procedural failings at Carillion, which became Britain's biggest corporate failure for decades when it went bust in 2018."


"The tribunal ruled on Thursday that five of the firm’s auditors - Peter Meehan, the partner responsible for auditing Carillion; senior managers Alistair Wright, Richard Kitchen and Adam Bennett; and junior auditor Pratik Paw - were all guilty of misconduct. "


The article goes on to discuss a call for some hefty individual fines and bans. They won't be having a "Silentnight" tonight ( (£13m fine for their mishandling of the Silentnight insolvency).

Comment from the CEO...

"As a firm, we are committed to serving the public interest with honesty and integrity."

[monabri]

https://www.thisismoney.co.uk/money/mar ... udits.html

"KPMG receives record UK fine over Carillion and Regenersis audits after providing inaccurate and misleading information to regulator
An industry tribunal has ordered accounting firm KPMG to pay a £14.4m penalty
Concerning the Carillion review, KPMG was found to have created false minutes
The sanctions include £365,000 in fines and bans from the auditing profession"

It would have been a £20m fine but KPMG " self reported"...

There is a note that the UK government is suing them for .....£1.3 billion!

[Bouleversee]

And how are we shareholders to be compensated? Their lack of proper auditing caused me to top up by quite a large amount and I lost the lot, as did many others. We won't see a penny, of course. It should be the top brass and staff involved who pay the fine not the company.

[Dod101]

And how are we shareholders to be compensated? Their lack of proper auditing caused me to top up by quite a large amount and I lost the lot, as did many others. We won't see a penny, of course. It should be the top brass and staff involved who pay the fine not the company.

In these cases, the company is the partners, the 'top brass'. KPMG is not a public company, so I guess the partners will suffer but these firms seem to be so profitable that they carry on regardless, until of course, like Arthur Anderson, they don't. It is though quite shocking that they should be indulging in this sort of practice in the first place. Mind you, anyone who relies on an auditor's report before investing......well they have more faith than I do. Carillion, like RBS, was a disaster waiting to happen, as I am sure I said at the time.

Dod

[88V8]

And how are we shareholders to be compensated?

I don't suppose we are, especially as the govt will be first in line... HMRC, then secured creditors...
There is this website, supposedly relating to a class action https://www.carillionclassaction.com/ but it seems inactive.

V8

[Alaric]

Concerning the Carillion review, KPMG was found to have created false minutes

I suppose that's an explanation of sorts as to why a Company given a clean bill of health on an audit can collapse a few months later.

[monabri]

https://www.expressandstar.com/news/bus ... -in-fines/

"A trio of former directors of failed outsourcing and construction giant Carillion are set to be fined £870,200 for “recklessly” publishing misleading accounts."

"The Financial Conduct Authority said that if Wolverhampton-based Carillion were not in liquidation it would have been fined £37.9 million.
The Wolverhampton-based business' former chief executive, Richard Howson, is set to get a £397,800 fine, chief financial officer Richard Adam faces paying £318,000. and former finance director Zafar Khan £154,400. Khan took over from Adam in January 2017."

"The FCA said that three of Carillion’s financial statements – published on December 7, 2016, March 1, 2017 and May 3, 2017 – were “misleading and did not accurately or fully disclose the true financial performance of Carillion”.

[Dod101]

https://www.expressandstar.com/news/business/2022/07/29/three-former-carillion-directors-face-870200-in-fines/

"A trio of former directors of failed outsourcing and construction giant Carillion are set to be fined £870,200 for “recklessly” publishing misleading accounts."

"The Financial Conduct Authority said that if Wolverhampton-based Carillion were not in liquidation it would have been fined £37.9 million.
The Wolverhampton-based business' former chief executive, Richard Howson, is set to get a £397,800 fine, chief financial officer Richard Adam faces paying £318,000. and former finance director Zafar Khan £154,400. Khan took over from Adam in January 2017."

"The FCA said that three of Carillion’s financial statements – published on December 7, 2016, March 1, 2017 and May 3, 2017 – were “misleading and did not accurately or fully disclose the true financial performance of Carillion”.

That seems to me to be far more significant than fining KPMG some enormous sum of money. Hit executives in the pocket. It will not help erstwhile shareholders in Carillion but may deter other executives. I never held shares in Carillion, because I never trusted them. Others who put their faith in audit reports are detaching themselves from the culture of the company itself. That is the vital test, always has been and always will.

Dod

Dod

[Bouleversee]

https://www.expressandstar.com/news/business/2022/07/29/three-former-carillion-directors-face-870200-in-fines/

"A trio of former directors of failed outsourcing and construction giant Carillion are set to be fined £870,200 for “recklessly” publishing misleading accounts."

"The Financial Conduct Authority said that if Wolverhampton-based Carillion were not in liquidation it would have been fined £37.9 million.
The Wolverhampton-based business' former chief executive, Richard Howson, is set to get a £397,800 fine, chief financial officer Richard Adam faces paying £318,000. and former finance director Zafar Khan £154,400. Khan took over from Adam in January 2017."

"The FCA said that three of Carillion’s financial statements – published on December 7, 2016, March 1, 2017 and May 3, 2017 – were “misleading and did not accurately or fully disclose the true financial performance of Carillion”.

That seems to me to be far more significant than fining KPMG some enormous sum of money. Hit executives in the pocket. It will not help erstwhile shareholders in Carillion but may deter other executives. I never held shares in Carillion, because I never trusted them. Others who put their faith in audit reports are detaching themselves from the culture of the company itself. That is the vital test, always has been and always will.

Dod

Dod

So why do auditors get away with charging such astronomic fees and paying their partners millions if we are stupid to put our faith in their reports? Their whole purpose is to spot errant behaviour such as has been demonstrated with Carillion but probably happens all too frequently if auditors are either in cahoots or just plain incompetent. We jolly well should be able to put our faith in them otherwise what is the point of them? I think both sides deserve massive fines on those in charge.

[Charlottesquare]

https://www.expressandstar.com/news/business/2022/07/29/three-former-carillion-directors-face-870200-in-fines/

"A trio of former directors of failed outsourcing and construction giant Carillion are set to be fined £870,200 for “recklessly” publishing misleading accounts."

"The Financial Conduct Authority said that if Wolverhampton-based Carillion were not in liquidation it would have been fined £37.9 million.
The Wolverhampton-based business' former chief executive, Richard Howson, is set to get a £397,800 fine, chief financial officer Richard Adam faces paying £318,000. and former finance director Zafar Khan £154,400. Khan took over from Adam in January 2017."

"The FCA said that three of Carillion’s financial statements – published on December 7, 2016, March 1, 2017 and May 3, 2017 – were “misleading and did not accurately or fully disclose the true financial performance of Carillion”.

That seems to me to be far more significant than fining KPMG some enormous sum of money. Hit executives in the pocket. It will not help erstwhile shareholders in Carillion but may deter other executives. I never held shares in Carillion, because I never trusted them. Others who put their faith in audit reports are detaching themselves from the culture of the company itself. That is the vital test, always has been and always will.

Dod

Dod

So why do auditors get away with charging such astronomic fees and paying their partners millions if we are stupid to put our faith in their reports? Their whole purpose is to spot errant behaviour such as has been demonstrated with Carillion but probably happens all too frequently if auditors are either in cahoots or just plain incompetent. We jolly well should be able to put our faith in them otherwise what is the point of them? I think both sides deserve massive fines on those in charge.

Because the auditors over the years raced to undercut one another with fees, more desktop audit programmes got used less thought was applied to the audit process.

Business entities are far more complicated than they were, contracts that determine profit recognition are more complicated and difficult to follow yet the amount of testing/analysis and thought applied, within the constraint of the audit fee budget, keeps getting squeezed.

If you want audits untainted by fee pressure you need a brand new government body ,paid for by a levy of say all quoted entities, that does all the audits for the entire 350.

[Dod101]

https://www.expressandstar.com/news/business/2022/07/29/three-former-carillion-directors-face-870200-in-fines/

"A trio of former directors of failed outsourcing and construction giant Carillion are set to be fined £870,200 for “recklessly” publishing misleading accounts."

"The Financial Conduct Authority said that if Wolverhampton-based Carillion were not in liquidation it would have been fined £37.9 million.
The Wolverhampton-based business' former chief executive, Richard Howson, is set to get a £397,800 fine, chief financial officer Richard Adam faces paying £318,000. and former finance director Zafar Khan £154,400. Khan took over from Adam in January 2017."

"The FCA said that three of Carillion’s financial statements – published on December 7, 2016, March 1, 2017 and May 3, 2017 – were “misleading and did not accurately or fully disclose the true financial performance of Carillion”.

That seems to me to be far more significant than fining KPMG some enormous sum of money. Hit executives in the pocket. It will not help erstwhile shareholders in Carillion but may deter other executives. I never held shares in Carillion, because I never trusted them. Others who put their faith in audit reports are detaching themselves from the culture of the company itself. That is the vital test, always has been and always will.

Dod

Dod

So why do auditors get away with charging such astronomic fees and paying their partners millions if we are stupid to put our faith in their reports? Their whole purpose is to spot errant behaviour such as has been demonstrated with Carillion but probably happens all too frequently if auditors are either in cahoots or just plain incompetent. We jolly well should be able to put our faith in them otherwise what is the point of them? I think both sides deserve massive fines on those in charge.

You have an answer from a professional in Charlottesquare. I fear that audits have long since become a box ticking exercise and if you read a lot of their reports you will see that they try to offload a lot on to the Directors of the Company. I am not sure that auditors were ever set up to be gamekeepers in the sense of seeking out deliberate fraud although that would seem to be a fundamental part of their job. In a decent world company directors ought to be on top of their job and be able to rely on the finance team to get things right but as was seen with Carillion that sometimes is not what happens (and sometimes indeed the Directors can be party to the fraud). We as investors need to be able to apply a wider judgement than simply rely on the Report and Accounts even if they have got a clean audit (which most of them will have) Both RBS and Carillion had relatively clean audits up to near the end as far as I know, but I never invested in either of them, Carillion because of the sector it was in. Far too easy to 'win' contracts but how to carry them through profitably is quite another matter and the antics of the Directors was appalling. For RBS, any company which had someone like Fred Goodwin as its CEO and the ridiculous ways he was behaving was bound to be heading for trouble, especially when we had an example of how to run a bank in the excellent, then independent, Bank of Scotland.

Dod

[seagles]

Record fine for KPMG.
Court cases to commence shortly.
Was a holder, got out before the end but with a HUGE loss of capital.