Latest Carillion revelations highlight need for root and branch reform of UK financial system
- Wednesday 1 September 2021
Unite, the UK’s leading union, is calling for root and branch reform of the UK’s financial regulator system after it emerged that KPMG, who audited Carillion’s accounts, faces a disciplinary hearing over its conduct, four years after the company collapsed.
Carillion collapsed in January 2018, with debts of £7 billion and the loss of thousands of jobs, including many workers in the company’s supply chain.
The Financial Reporting Council, which is responsible for the regulation of auditors today (Wednesday 1 September) announced that KPMG faces a disciplinary tribunal in January next year.
The tribunal relates to “false and misleading” information supplied by the company with regards to the 2016 audit of Carillion’s accounts.
Financial experts have stated that Carillion was trading while insolvent for months if not years prior to its collapse.
Despite Carillion’s collapse, the largest corporate failure in modern times, none of the investigations into who was responsible for the company’s collapse have concluded and none of those responsible have been found guilty of any wrongdoing.
No one found guilty
Unite assistant general secretary Gail Cartmail said: “It is quite extraordinary that over three and half years after Carillion’s collapse no one has been found guilty and investigations are dragging on at a snail’s pace.
“The workers who lost their jobs and had their lives ruined have been entirely forgotten.
“The failure of the UK’s financial regulatory system to respond to Carillion’s collapse and to implement measures to prevent similar corporate failures in future, demonstrates why the entire system requires urgent root and branch reform.
“It is absolutely essential that workers are reassured that their employer is not playing fast and loose with their futures and their livelihoods are not at risk of disappearing overnight.
“It is a sad indictment of the present government that it has taken no action to ensure that a Carillion style collapse will never be repeated.”
Ending Bandit Capitalism
Unite produced a comprehensive report: Ending Bandit Capitalism Learning the lessons from Carillion’s collapse, which detailed a series of recommendation into how the UK’s financial system needs to be improved to protect workers. These included:
- The breakup of the big four audit companies, with the function of auditing being spun off into separate companies
- New rules to require auditors to have a duty of care to employees
- A reduction in the number of financial regulators with those that remain having clear roles and real legal teeth.
For more information please contact Unite senior communications officer Barckley Sumner on 020 3371 2067 or 07802 329235.
Email: [email protected]
Twitter: @unitetheunion Facebook: unitetheunion1 Web: unitetheunion.org
Unite is the UK and Ireland’s leading union fighting to protect and advance jobs, pay and conditions for members working across all sectors of the economy. The general secretary is Sharon Graham.