Jessica Fino 12 Mar 2018 04:20pm

Carillion paid advisors £6.4m day before bailout plea

Carillion paid £6.4m to KPMG, EY, PwC and other City advisors the day before requesting a £10m taxpayer bailout, MPs have found

The Business, Energy and Industrial Strategy (BEIS) and Work and Pensions committees said that EY was paid £2.5m one day before the bailout was requested, while KPMG was paid £78,000, PwC £276,000, Slaughter and May £1.2m and FTI Consulting £1.1m.

According to new information received from the Official Receiver, the government refused the bailout at a meeting with Carillion chairman Philip Green on Sunday 14 January and the company was forced to apply for insolvency as soon as the courts opened on Monday morning.

Frank Field MP, chair of the BEIS committee, said, "With the company teetering on the abyss, Mr Green had the cheek to try and get the government to surrender another £160m of taxpayers' money. I am not surprised the government took with a pinch of salt his assurances that all would be reimbursed once he had unscrambled the eggs.”

The committees published a “final request” letter that Green sent on Saturday asking for a "final" tranche of support, as a "bridge to restructuring".

“The most troubling element of this letter is its demands for an immediate £10m from taxpayers, the very next day after Carillion shelled out £6.4m to its illustrious advisers, including the EY restructuring gravy train and half the law firms in the City of London. The smaller suppliers that are the lifeblood of the British economy of course got no such treatment,” Field added.

Meanwhile, Rachel Reeves, chair of the BEIS committee, accused Carillion of paying “expensive advisers” while workers “risked losing jobs and long-suffering suppliers faced financial ruin".

The committees have previously accused the Big Four of “feasting on the carcass” of Carillion, after receiving a combined total of £71.6m in fees. The Financial Reporting Council is currently investigation KPMG’s audit work on the company.