1. ITV Report

Former Carillion bosses blasted for failing to prevent firm's collapse

Former bosses at Carillion have been accused of taking huge salaries while failing to spot the signs of the firm's impending collapse as they appeared in front of MPs.

Executives were told to explain why they had continued to approve large dividend payouts to investors and salary rises for themselves over a number of years despite concerns over profitability and cashflow.

They were also asked why they had not taken more action to correct a large black hole in the pensions fund, at a joint hearing of the Commons Business, Energy and Industrial Strategy Committee and the Work and Pensions Committee.

Ex-chairman Philip Green said he took "full and total" responsibility for the firm's failure - though he did not consider himself "culpable".

And former chief executive Keith Cochrane insisted that a short-term cash bailout could have allowed them to carry on, avoiding hundreds of job losses.

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The bosses were told they "should not be let loose in other companies" in tough exchanges with MPs.

Work and Pensions Committee chairman Frank Field suggested the Government should find that key executives are not “fit and proper people" to serve on any other companies.

Former Carillion executives have denied they failed to spot the warning signs.

And Rachel Reeves MP suggested that their expressions of sadness and regret were "just words" while the company's workers would suffer the real consequences.

She challenged them to hand back some of their salary packages to help those learning they would get lower pensions as a result of the firm's failures.

You say how sad and disappointed you are, but what actions do you take to show that?

Because it’s just words isn’t it? Just words - 'I’m saddened and disappointed, I wish I could have done things different, but the money’s in the bank'.

But it’s not in the bank is it, for the sub-contractors, and it’s not in the bank for the people who are retired or coming up for retirement?

So instead of the words, why don’t you actually do something? Why don’t you give some money back? And try to make a difference, try and put right some of this wrong?

– Rachel Reeves
Carillion had been issuing warning for months before it collapsed. Credit: PA

The executives insisted they had done all they could - though with hindsight they might have acted differently.

Mr Green said the factors that led to it going into administration were its debt level, contrasts that went badly wrong, and a failure to get short-term funding in January.

Former finance director Zafar Khan also gave evidence in which he denied that he had been "asleep at the wheel" while in his post.

"I believe I did everything that I could have done, essentially," he said.

Carillion was struggling under nearly £900 million of debt and last year reported a £587 million pension deficit.

It had been forced to issue a string of profit warnings in 2017, after a review of its construction contracts found them to be much less valuable than previously thought.

The firm then failed to gain further funding from lenders and collapsed last month.