Carillion’s collapse threatens to create a “domino effect” among subcontractors employing thousands of workers, the head of the Federation of Master Builders has warned
Speaking on BBC Radio 4’s Today programme, FMB chief executive Brian Berry said Carillion relied heavily on subcontractors to deliver its projects and these company’s are relying on cash that has suddenly stopped.
“We are in a very precarious position where thousands of workers don’t know quite what their position is and often they can’t get on site,” he said.
“Carillion aren’t doing the work; they are relying on subcontractors to do the actual building work.
“Those companies are relying on the money coming from Carillion. That has stopped.”
Elsewhere, business secretary Greg Clark has instructed the Insolvency Service to “fast-track” an investigation into Carillion’s directors and to broaden its scope to also look at previous directors.
In addition, he has written to the chairman of the Financial Reporting Council, Sir Win Bischoff, asking him to examine the preparation of Carillion’s accounts past and present, as well as the company’s auditors.
The Financial Conduct Authority had already announced an investigation into statements it issued prior to the profit warning it issued last July, which triggered a dramatic fall in the company’s share price.
“It is important we quickly get the full picture of the events which caused Carillion to enter liquidation, which is why I have asked the Insolvency Service to fast-track and broaden the scope of the Official Receiver’s investigation,” Clark said.
“In particular, I have asked that the investigation looks not only at the conduct of the directors at the point of its insolvency, but also of any individuals who were previously directors. Any evidence of misconduct will be taken very seriously.”
