Mykotori

Carillion directors ‘delusional’ to think the Government would provide a bailout

Carillion directors were “delusional” to think that the Government would provide emergency funding to keep the company afloat during a tense weekend of negotiation with lenders.Keith Cochrane, who was chief executive of the company when it was put into liquidation on January 15, told a parliamentary select committee on Tuesday that he was “still perplexed” that the Government would not offer financial support in Carillion’s final hours.But Meg Hillier, chair of the committee, said: “It seems… delusional that you would assume or believe that Government would use taxpayers’ money to prop you up at that point.”Mr Cochrane told the committee that he, along with other members of Carillion’s senior management team, had drawn up in early January what he considered to be a viable business plan for the company, which involved asking banks and the Government to put in £10m each.But he said that he was “surprised” and “very, very disappointed” that discussions with the Government, which accounted for 47pc of Carillion’s work at the time, came to nothing.“We believed it was a logical case,” Mr Cochrane said, adding that he did not consider the money a bailout, but a “short-term loan to help us facilitate further restructuring”.Philip Green, Carillion’s chairman, said he had been optimistic that a recovery plan could succeed right up until the company went into liquidation, and he expressed “deep disappointment and surprise” at the Government’s response.

“We believed passionately in the business plan. We believed it was a business capable of making cash. Liquidation was the worst outcome for all stakeholders, including the Government,” he said.MPs expressed surprise when Mr Green revealed to the committee that he had not been in discussions with the Government about Carillion’s future until the day before it entered into liquidation, instead leaving negotiations to the management team.Mr Cochrane was also quizzed on contracts which Carillion won after it had issued a profit warning in July 2017, including an agreement to build part of High Speed Two railway. “A business such as Carillion is underpinned by confidence of its employees and supply chain, so the fact that a major customer was continuing to award us new work was certainly a sign of confidence and encouraging in terms of our discussion with banks because it demonstrated that the underlying work we were doing was well-regarded,” he explained.Meanwhile, a row over a Carillion contract in Qatar has also stepped up a notch as the Qatari company behind the project accused the UK contractor of having “mismanaged the works, under-resourced them and starved the project of cash”.

Original Source

Similar As

DylanThomas

Add comment

Your Header Sidebar area is currently empty. Hurry up and add some widgets.