Carillion paid advisers £6.4m before plea for bail-out
It has emerged that collapsed construction and outsourcing group Carillion paid £6.4 million to advisers the day before pleading with the Government for an emergency taxpayer-supported loan of £10m.
The Wolverhampton-based business made the payments to private consultants and a law firm on January 12, new figures released by the Official Receiver have revealed.
The following day Carillion chairman Philip Green wrote to the Cabinet Office warning the company would fall into a “very disorderly and value destructive” insolvency that would harm its workers, customers and suppliers if it could not secure a bail-out.
The Government refused on Sunday, January 14 and Carillion applied for liquidation the next day.
The payments included £2.5m to accounting firm Ernst and Young, £1.2m to law firm Slaughter and May, £1m to FTI Consulting and £500,000 to Lazard and Co.
Chairman of the House of Commons business select committee Rachel Reeves MP, said Carillion’s board “ensured that the costs of failure would be picked up by the taxpayer – either from a bail-out or footing the bill for a desperate clean-up operation”.
She said that "expensive" advisers still pocketed millions while workers risked losing jobs and long-suffering suppliers faced financial ruin.
Around 1,500 Carillion jobs have been lost and 8,000 salvaged from its 18,000-strong UK workforce since the group entered liquidation.
The jobs of around 8,000 more – including 400 at its Wolverhampton headquarters – still hang in the balance.
Select Property Group has appointed Sir Robert McAlpine to replace Carillion on its £53m Affinity Living Riverside and £100m Riverview apartment blocks developments in Salford.
Robertson Construction Group has also been the job of finishing a £37m college in Greater Manchester that was being delivered by Carillion.
Former Carillion staff have transferred to Robertson on the Vision Tameside project.
