Carillion used suppliers to “prop up a failing business model” and conceal true levels of debt, say MPs investigating the failed government contractor.
The parliamentary inquiry into the collapse of a company that provided a host of vital public services, including catering in schools, prison maintenance and construction of new NHS hospitals will conclude on Wednesday with the publication of the MPs’ final report. It is expected to name and shame those responsible for the failure of the listed company, which had a UK staff of nearly 20,000 when it crashed into administration in January.
In a taste of what is to come, the work and pensions committee chairman, Frank Field, said: “Carillion displayed utter contempt for its suppliers, many of them the small businesses that are the lifeblood of the UK’s economy.
“The company used its suppliers as a line of credit to shore up its fragile balance sheet, then in another of its accounting tricks ‘reclassified’ this borrowing to hide the true extent of its massive debt.”See Icons passim.