Carillion

This article is about the British company. For the musical instrument, see Carillon.

Carillion plc
Company typePublic limited company
LSE: CLLN
IndustryConstruction, civil engineering, facilities management
Founded1999; 25 years ago (1999) (demerger from Tarmac)
Defunct15 January 2018 (15 January 2018)
FateCompulsory liquidation
HeadquartersWolverhampton, West Midlands, United Kingdom
Key people
Revenue£5,214.2M (2016)[1]
£235.9M (2016)[1]
£129.5M (2016)[1]
Number of employees
c. 43,000; with 19,000 in the UK (2016)[a][3]
Websitepwc.co.uk/carillion

Carillion plc was a British multinational construction and facilities management services company headquartered in Wolverhampton in the United Kingdom, prior to its liquidation in January 2018.[4][5]

Carillion was created in July 1999, following a demerger from Tarmac. It grew through a series of acquisitions to become the second largest construction company in the United Kingdom,[6] was listed on the London Stock Exchange, and in 2016 had some 43,000 employees (18,257 of them in the United Kingdom). Concerns about Carillion's debt situation were raised in 2015, and after the company experienced financial difficulties in 2017, it went into compulsory liquidation on 15 January 2018, the most drastic procedure in UK insolvency law, with liabilities of almost £7 billion.

In the United Kingdom, the insolvency caused project shutdowns and delays in the UK and overseas (PFI projects in Ireland were suspended, while four of Carillion's Canadian businesses sought legal bankruptcy protection), job losses (over 3,000 redundancies in Carillion alone, plus others among its suppliers), financial losses to clients, joint venture partners and lenders, to Carillion's 30,000 suppliers (some of which were pushed into insolvency), and to 27,000 pensioners, and could cost UK taxpayers up to £180M. It also led to questions and multiple parliamentary inquiries about the conduct of the firm's directors, its auditors (KPMG), the Financial Reporting Council and The Pensions Regulator, and about the UK Government's relationships with major suppliers working on private finance initiative (PFI) schemes and other privatised outsourcing of public services (in October 2018, the UK Government said no new PFI projects would be started). It also prompted legislation proposals to reform industry payment systems, consultations on new government procurement processes to promote good payment practices, and proposed FRC reforms to the treatment of directors' bonuses paid in shares.

The May 2018 report of a Parliamentary inquiry by the Business and the Work and Pensions Select Committees said Carillion's collapse was "a story of recklessness, hubris and greed, its business model was a relentless dash for cash", and accused its directors of misrepresenting the financial realities of the business. The report's recommendations included regulatory reforms and a possible break-up of the Big Four accounting firms. A separate report by the Public Administration and Constitutional Affairs Select Committee, in July 2018, blamed the UK government for outsourcing contracts based on lowest price, saying its use of contractors such as Carillion had caused public services to deteriorate.

  1. ^ a b c "Preliminary Results for year ended 31 December 2016" (PDF). Carillion. Archived from the original (PDF) on 18 March 2017. Retrieved 18 March 2017.
  2. ^ "Carillion Annual Report and Accounts 2016" (PDF). Carillion. p. 105. Archived from the original (PDF) on 16 January 2018. Retrieved 27 March 2018.
  3. ^ Kollewe, Julia (15 January 2018). "What went wrong with Carillion and where does it go from here?". The Guardian. Archived from the original on 29 January 2018.
  4. ^ Companies House. "CARILLION PLC (03782379) overview". gov.uk. Archived from the original on 28 July 2021. Retrieved 5 May 2018. Commencement of winding up: 15 January 2018
  5. ^ Companies House. "CARILLION PLC (03782379) insolvency". gov.uk. Archived from the original on 28 July 2021. Retrieved 5 May 2018. Company status: Liquidation
  6. ^ "Carillion's collapse raises questions about pension protection". The Economist. Archived from the original on 16 January 2018. Retrieved 16 January 2018.{{cite news}}: CS1 maint: bot: original URL status unknown (link)


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