Carillion inquiry demands transport secretary Chris Grayling answers accountant ‘conflicts of interest’ queries
A parliamentary inquiry into Carillion’s failure has written to transport secretary Chris Grayling, demanding answers about multiple roles performed by Big Four accountant EY.
Under the heading “conflicts of interest”, MPs have asked Grayling if he was aware EY was simultaneously supporting Carillion’s management on the perilous state of the firm’s finances while also advising the government and the impact of Carillion’s problems on the delivery of its High Speed 2 (HS2) rail network.
EY was formally engaged by Carillion on 17 July, a week after the firm announced a shock £845m contract write-down. On the same day EY was hired, a Carillion-led joint venture was awarded a £1.4bn contract to build the HS2 network by the department for transport (DfT).
Carillion paid EY more than £13m between July 2017 and January 2018 for restructuring advice. EY billed HS2 £197,001 in 2017 for performing financial analysis on its contractors – of which £29,000 related to reviewing Carillion consortium bids.
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Weighed down by enormous debts, Carillion, which employed around 40,000 worldwide, collapsed into liquidation on 15 January.
The letter is the latest twist in a joint inquiry by the work and pensions and business, energy and industrial strategy committees. Last week MPs released a damning report into Carillion’s failure, criticising its directors, auditors, regulators and the government.
Committee co-chairs Rachel Reeves and Frank Field posed 11 questions to Grayling, wanting to know not only if he was aware of EY’s multiple roles but whether he considered them a conflict of interest and what mitigating actions were taken. In addition, the inquiry chiefs wanted further detail of the timing of the EY work and whether it was competitively tendered for.
EY and the DfT have been approached for comment.
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