KPMG settles £1.3bn bill over outsourcer Carillion
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KPMG’s UK firm settles £1.3bn legal battle with liquidators of collapsed outsourcer Carillion
KPMG’s UK firm settled a £1.3bn legal battle with the liquidators of collapsed outsourcer Carillion.
The consulting giant was sued in the Supreme Court last year by the Official Receiver, part of the government’s Insolvency Service, over failed audits of Carillion.
The liquidators claimed that Carillion was insolvent for more than two years before collapsing in January 2018 and that KPMG had missed “red flags” that caused the group’s accounts to be misrepresented.
Settlement: The consulting giant was sued in the Supreme Court last year by its official receiver over failed audits of Carillion
The legal claim also alleged that KPMG failed to maintain its independence while conducting the audits, in breach of its professional and ethical obligations.
They sought damages, including around £210 million in dividends paid by Carillion to investors between 2014 and 2017, as well as professional fees worth £31 million.
They also pushed up more than £1bn in losses as the group continued to trade despite the incorrect accounts.
Carillion collapsed in January 2018 with £7 billion in debt, resulting in 3,000 job losses and causing chaos at hundreds of projects and public works including schools, roads, prisons and even Liverpool FC’s stadium, Anfield.
This month, KPMG increased the size of its provision for future fines and legal claims from £144 million to £179 million. KPMG’s UK boss Jon Holt said: “I’m glad we were able to resolve this claim.”