If you didn’t watch Channel 4’s Dispatches on Carillion last night but you read the CN Briefing, you didn’t miss much.
How to Lose Seven Billion Pounds was a good blow-by-blow account of the circumstances that led to Carillion’s collapse.
Our finance reporter David Price, who was interviewed by researchers for the programme, described it as a summary of the inquiry into the contractor’s demise, details of which may not have reached the wider public until now.
There was the drama necessary for TV, with reporter Liam Halligan hamming it up by staring at buildings emblazoned with the logos of Carillion, KPMG and others.
Interesting snippets included Carillion’s former head of recruitment seemingly laying the blame squarely at the door of former finance director Richard Adam.
Some, including Mr Adam’s short-term replacement as FD Zafar Khan and interim CEO Keith Cochrane, were largely spared blame.
Former chairman Philip Green meanwhile came in for milder criticism than one might expect, while construction FD Emma Mercer was praised for trying to raise red flags.
Mr Adam and, to a lesser extent, Richard Howson were the main bosses in the firing line, in keeping with the MPs’ damning report in May.
Hedge fund manager Tim Steer said its most recent set of accounts had “understated debt”, while financial writer Frances Coppola said Carillion was “essentially insolvent as far back as 2016”.
Mr Steer also described company accounts as “an iceberg”.
“If you see something bad above the water line, there’s bound to be a lot worse below the water line,” he added (good to see he’d been reading CN – we revealed the true extent of the losses back in April).
Former auditor general Sir John Bourn described Carillion as a Ponzi scheme and said he was “surprised” the government gave it further contracts in 2017 after its massive profit warning.
Contributors to the programme were keen to say how obvious it had been that Carillion would collapse, yet at the same time how shocked they had felt when its £845m profit warning emerged.
Dispatches described the £1.4bn HS2 contract won by a Carillion / Kier / Eiffage JV, just weeks after that July profit warning, as having been awarded while Carillion was “now in freefall… but suddenly, a saviour appeared with a sackful of taxpayers’ cash”.
Wider discussion of the HS2 contract in question still fails to account for the fact that the bidders had been shortlisted in March 2016, long before the extent of Carillion’s problems were known.
Rather than the timing of the award, the more pertinent question is: why did the scale of Carillion’s problems remain such a mystery within Whitehall during the bidding process?
And while the government’s actions make for good TV, surely the role of auditor KPMG in signing off the accounts warranted more scrutiny?
It was left to Frank Field, the MP who co-chaired the inquiry, to soak up the camera as he talked of potential criminal prosecutions for board members, saying they “ought not to be resting easily in their beds”.
I’d pay to watch Mr Field as a crime boss in a Netflix series any day.
We may not have learned anything new last night, but the story will run for years to come. To keep informed, bookmark our Carillion page now.
* CN100 2018, the definitive guide to the construction industry’s financial health, is published on Wednesday, 5 September. Subscribe now to find out how the sector is gearing up for the future, post-Carillion.