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Carillion bosses to face further scrutiny over late payment claims

howson

MPs will further scrutinise the alleged late payments to sub-contractors by Carillion after the Commons’ committee looking into the collapse of the construction giant invited the Federation of Small Business (FSB) to resubmit evidence.

The FSB had previously said Carillion was a “notorious late payer” that had “abused their dominant position”, with payment delays sometimes stretching to four months. However, the accusation was dismissed by Carillion’s former directors when they gave evidence to the joint Work & Pensions and Business, Energy and Industrial Strategy Committee last week.

Trade bodies have repeatedly urged the government to address the issue of late payments and retention payments following Carillion’s liquidation.

At the hearing, directors said they “did not recognise” the reputation for poor payment and that any late payments were “outliers”.

But the committee has now invited the FSB to respond to the directors’ rejection of its claim. 

The invitation comes as the committee published a series of letters today, pressing the directors for more detailed explanations of points made in last week’s oral evidence session.

Following the initial evidence session, inquiry co-chairs Frank Field MP and Rachel Reeves MP slammed the former bosses as “delusional characters” who “built an entire company on sand in a desperate dash for cash”.

Former CEO Richard Howson’s claim that four contracts were to blame for the downfall of the company will also come under scrutiny as the board has asked for more details from the organisations involved.

Last week Qatari developers challenged the evidence given by Howson that he “felt like a bailiff” when he tried to recoup £200M owed from work on the Msheireb Downtown redevelopment.

Howson alleged that problems on the Aberdeen Western Peripheral Route, the Midlands Metropolitan Hospital and the Royal Liverpool University Hospital were also to blame for the company’s financial woes.

Former chief finance officer Zafar Khan, chairman Philip Green, former interim chief executive Keith Cochrane and former finance director Richard Adam have also been pushed for more detail on evidence they gave to the panel, with Khan being asked about the terms of his departure from the company and whether he signed a non-disclosure agreement.

 

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