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Carillion boss tells MPs he's 'truly sorry' for collapse of construction contractor

"It was the worst possible outcome," Carillion's boss said of the company's failure
Carillion entered liquidation on January 15

Carillion’s interim chief executive Keith Cochrane told MPs on Tuesday that he was “truly sorry” for the collapse of the construction firm.

The construction and services company entered liquidation on January 15 after the failure over talks over its debt pile with lenders and the government.

Carillion held a number of contracts across education, the NHS and the rail industry, so the company’s demise forced the government to step in to ensure these public services were upheld.

Cochrane, who took over the reins on a temporary basis last July after Richard Howson stepped down as chief executive following multiple profit warnings, faced questions from MPs over the company’s failure on Tuesday.

"I‘m truly sorry," he said. "It was the worst possible outcome. This was a business worth fighting for and that’s certainly what I sought to do during my time as chief executive."

Board should have asked more questions, says Cochrane

Cochrane, a non-executive director and former chief executive of Weir Group and Stagecoach before stepping up as boss of Carillion, said net debt was too high at the end of 2016.

The company was working to cut its debt before it faced a deterioration of cash flow after March 2017, he said.

While the problems started well before he took the helm, Cochrane said he wished he had done something sooner to prevent Carillion’s collapse.

"Clearly with the benefit of hindsight should the board have been asking further, more probing questions? Perhaps," he said.

Carillion employed 43,000 people, including about 20,000 in the UK.

READ: Carillion collapse: True scale of fundamental flaws being revealed, says Unite union

On Monday, the company announced a further 452 job losses on top of the 277 already being made redundant.

Carillion's auditor under investigation 

Towards the end of January, the Financial Reporting Council (FRC) said it has decided to open an investigation in relation to KPMG's audit of the Carillion’s financial statements.

READ: Carillion's troubles continue as accounting watchdog says to probe KPMG audits after profit warning

The investigation will cover the years ended 31 December 2014, 2015 and 2016, and additional audit work carried out during 2017.

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January 29 2019
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