Carillion chairman ‘no grip of reality’ before vast writedown

Aaron Morby 6 years ago
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Watchdog MPs investigating the collapse of Carillion have delivered further stinging judgments on the board of the company after releasing more documents.

Chairman Phillip Green was accused of lacking a grasp of reality as he remained “upbeat” days before the massive profit warning.

It comes a day after Carillion bosses were labelled “fantasists” and former chief executive Richard Howson was described as “chasing a pot of gold” in believing the firm was entitled to £200m on its loss-making Qatari contract.

Boardroom minutes record Green, who had been on the board since 2011 and chairman since 2014, expressing his belief that “work continued toward a positive and upbeat announcement for Monday [10 July], focusing on the strength of the business as a compelling and attractive proposition” – five days before it announced the £845m profit warning that marked the beginning of the end.

Frank Field, chair of the work and pensions committee, said: “Carillion’s chair appeared to lack even a tenuous grasp on the reality of the company’s situation.

“Five days before the profit warning that heralded the firm’s public spiral into insolvency, Philip Green stands like the Mayor of Pompeii – smoke billowing from the volcano behind him, lava cascading down the slopes – trumpeting the forthcoming revelries of the village fete.

“It is difficult to believe the chairman of the company was unaware of its position, but equally difficult to comprehend his assessment if he was.”

Rachel Reeves, chair of the business, energy and industrial strategy committee said also hit out at the woeful lack of leadership.

“A good board should be asking difficult questions.

“By contrast, the Carillion board, when faced with difficult answers, declined to face up to facts and did nothing to address the causes of the company’s decline.

“Its chairman’s assessment of Carillion as “a compelling and attractive proposition” shows either a woeful lack of leadership or no grip on reality.”

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