Carillion directors to be investigated

[Primo Carnera]

Master, mate, you need to be in possession of the full facts.

I know Carillion extremely well indeed on a first hand basis.

I have set up and run Joint Ventures with them, have competed against them in bids, have bought and sold businesses to them, have taken over contracts from them, and have dealt with them when they have taken over contracts from us. I have TUPE transferred staff from them and to them. I have poached their staff and they have poached mine. I have many friends who work for them. My wife also worked directly for Carillion very recently indeed, for many years.

As usual, journalists who do not have a clue are offering simplified reporting and viewpoints which are prejudiced by their own beliefs. Equally, on this very forum, we have had people conveniently cherry picking stuff to add to their already formed world view.

It is true that Carillion's directors have failed, and should not be rewarded for that failure. The 'golden parachutes' awarded for failure are just wrong and should not have been made. If it is true, as has been reported, that the remuneration board changed the bonus rules in 2015, again that should be investigated. Note, though, that nobody on that Board is a Carillion employee. The head of it is the HR Director of Tesco. Why is nobody asking the non-executive directors these questions. They are the ones who have also actually failed because their role is governance and to provide outside perspective.

The vultures at EY are now making millions by running the liquidation. But it was KPMG who signed off the accounts every year, earning hundreds of thousands of pounds. When EY fuck up somebody else's accounts, KPMG will Be the liquidators and earn millions. Why is nobody challenging this cosy and illegal cartel?

The reasons the company went bust are complex, but essentially it boils down to them being too aggressive in how they book cash and profit. They booked profit every year on long term contracts when the actual profit was unclear. I have known this for a fact for over 5 years. This was driven by their demanding shareholders ..... 72% of whom are banks.

Nobody comes out of this well.

Carillion's directors have clearly failed. They then ended up in a Ponzi like scheme where they 'bought' shit new contracts in an attempt to mask underlying long term losses. Their middle management are guilty of being complicit in the whole shambles for many years and taking undeserved bonuses too. Accountants are guilty of overstating cash and profit. Carillion staff are also bonused, they were happy to take the bonuses. Their competitors are guilty of joining the race to the bottom in terms of bidding for work with little or no margin possibility.

The government are acting all pious and surprised. However, two thirds of Carillion's work was with the government. Government contracts are not particularly profitable, but do provide reliable cashflow. PFI and PPP contracts are now weighted firmly in favour of the government, with margins usually in the 2.5 to 3% region, which is not blatant profiteering. The government knew Carillion were in trouble and needed cash, so they aggressively negotiated new and existing contracts in their favour. My wife's public sector customer regularly applied penalties to Carillion, which resulted in the contract being permanently loss making. Her customer said 'we need the money as our budgets have been cut and you're a big enough business. Oh, and by the way, if you don't agree to do this extra work for free, I will just make sure I get it back next month in penalties anyway.' Her customer was shambolic, and wasteful in the way they ran their own business.

Terrible customers, who believe that the company was a magic money tree.

Central government say that they will not bail out a private company for the benefit of shareholders ..... unless its a bank, eh! And it is those banks that ultimately drove the company into liquidation.

The Opposition are jumping onto the bandwagon to make this a case for broader nationalisation, because public services should be delivered by a public sector with a public sector ethos. That's a joke, it was two thirds of Carillion's customers who helped make them bankrupt by being awful customers. Great ethos.

Anybody close has known for at least 5 years that the company was in trouble, including all of the above. But now everybody is acting surprised. Hypocrisy at its best.

incidentally, I have to pull you on your comment about directors stealing people's pensions. Carillion have a huge black hole in their final salary pension schemes (not in any other scheme). In 1996 their final salary pension pot stood at +127%. That is a healthy, well invested surplus. In 1997, chancellor Gordon Brown raided private company pension schemes for about £120 BILLION. They charged a tax levy, changed tax rules and - at the time of the next valuation - Carillion's final salary pension was nearly £1 billion in deficit. They had not changed their investment strategy and their returns were consistent to what they were before. Pension funds are quite well protected from their own companies, but not government. It wasn't the Carillion directors who stole the staff pensions.

My wife is really upset by what has happened, and I suspect I am much closer to it than anyone else on this forum. It is annoying when people spit out opinions when they do not know the facts, so much of the stuff I've seen on TV isn't even credible.

Rant over, and I'm not having a go at you, Master. I won't be getting into any sort of debate about this on the internet, because there is no value in doing so.

Great Post X. @Master , you should take note mate. It's easy to go on a big idealistic crusade without all the facts. There are many people responsible for what has happened here and there are many HYPOCRITES as well.
I also believe that The pressure they are put under to win some of these large Government contracts and penalties are why they make losses on projects. Yet it is the Banks, Financial Institutions and Government that have allowed Carrillion to rack up such a massive debt. There's a lot more to this scandal than a few directors walking off into the sunset with a few grand!
also , these contracts are still gonna have to be completed, and the big guns will queue up to bid, and then they will be under the same pressures and probably rack up a shit load of debt and cave in as well.

You should stop telling Master what to do. Maybe it's just me but you come across as incredibly patronising most the time yourself Primo.

@Beanz , and YOU should stop telling me what to do! Talk about pot calling the kettle black ffs!
He made a load anti Capitalism crusade comments without knowing what the fuck he was talking about apart from copying and pasting journalism from one side of the issue.
What the fuck happened to balance?
I have no clue what the fuck you do, nor do I particularly give a shit, but I am heavily involved in this industry and so are some people very close to me who have been affected.
So instead of the predictable “blame the fat cat bosses” cries, realise that it is far deeper than that.

[Master]

I work in procurement and in the private sector and it is my job to ensure that there is due diligence carried out when we contract with a provider. If you only award to the lowest bid which is unrealistic then it is a false economy.

What X describes in his post is very bad and abuse of contract management.

The anti-capitalist rant was me being sick of public assets being sold to the private sector and PFI contracts have been a failure.

[Primo Carnera]

I work in procurement and in the private sector and it is my job to ensure that there is due diligence carried out when we contract with a provider. If you only award to the lowest bid which is unrealistic then it is a false economy.

What X describes in his post is very bad and abuse of contract management.

The anti-capitalist rant was me being sick of public assets being sold to the private sector and PFI contracts have been a failure.

Obviously you have a grasp of Contract Administration and I respect that, and I agree about awarding to the lowest bid being a false economy. I also agree about PFI Contracts in the whole and the lack of clarity.
But my point was that it's easy to highlight the guy with a golden handshake, but in truth he is just a very small cog in a very large wheel of corruption and mismanagement of funds and before firing the gun of blame, this is what should be focussed on.
Anyway mate, I never meant you any disrespect.

[Beanz]

Master, mate, you need to be in possession of the full facts.

I know Carillion extremely well indeed on a first hand basis.

I have set up and run Joint Ventures with them, have competed against them in bids, have bought and sold businesses to them, have taken over contracts from them, and have dealt with them when they have taken over contracts from us. I have TUPE transferred staff from them and to them. I have poached their staff and they have poached mine. I have many friends who work for them. My wife also worked directly for Carillion very recently indeed, for many years.

As usual, journalists who do not have a clue are offering simplified reporting and viewpoints which are prejudiced by their own beliefs. Equally, on this very forum, we have had people conveniently cherry picking stuff to add to their already formed world view.

It is true that Carillion's directors have failed, and should not be rewarded for that failure. The 'golden parachutes' awarded for failure are just wrong and should not have been made. If it is true, as has been reported, that the remuneration board changed the bonus rules in 2015, again that should be investigated. Note, though, that nobody on that Board is a Carillion employee. The head of it is the HR Director of Tesco. Why is nobody asking the non-executive directors these questions. They are the ones who have also actually failed because their role is governance and to provide outside perspective.

The vultures at EY are now making millions by running the liquidation. But it was KPMG who signed off the accounts every year, earning hundreds of thousands of pounds. When EY fuck up somebody else's accounts, KPMG will Be the liquidators and earn millions. Why is nobody challenging this cosy and illegal cartel?

The reasons the company went bust are complex, but essentially it boils down to them being too aggressive in how they book cash and profit. They booked profit every year on long term contracts when the actual profit was unclear. I have known this for a fact for over 5 years. This was driven by their demanding shareholders ..... 72% of whom are banks.

Nobody comes out of this well.

Carillion's directors have clearly failed. They then ended up in a Ponzi like scheme where they 'bought' shit new contracts in an attempt to mask underlying long term losses. Their middle management are guilty of being complicit in the whole shambles for many years and taking undeserved bonuses too. Accountants are guilty of overstating cash and profit. Carillion staff are also bonused, they were happy to take the bonuses. Their competitors are guilty of joining the race to the bottom in terms of bidding for work with little or no margin possibility.

The government are acting all pious and surprised. However, two thirds of Carillion's work was with the government. Government contracts are not particularly profitable, but do provide reliable cashflow. PFI and PPP contracts are now weighted firmly in favour of the government, with margins usually in the 2.5 to 3% region, which is not blatant profiteering. The government knew Carillion were in trouble and needed cash, so they aggressively negotiated new and existing contracts in their favour. My wife's public sector customer regularly applied penalties to Carillion, which resulted in the contract being permanently loss making. Her customer said 'we need the money as our budgets have been cut and you're a big enough business. Oh, and by the way, if you don't agree to do this extra work for free, I will just make sure I get it back next month in penalties anyway.' Her customer was shambolic, and wasteful in the way they ran their own business.

Terrible customers, who believe that the company was a magic money tree.

Central government say that they will not bail out a private company for the benefit of shareholders ..... unless its a bank, eh! And it is those banks that ultimately drove the company into liquidation.

The Opposition are jumping onto the bandwagon to make this a case for broader nationalisation, because public services should be delivered by a public sector with a public sector ethos. That's a joke, it was two thirds of Carillion's customers who helped make them bankrupt by being awful customers. Great ethos.

Anybody close has known for at least 5 years that the company was in trouble, including all of the above. But now everybody is acting surprised. Hypocrisy at its best.

incidentally, I have to pull you on your comment about directors stealing people's pensions. Carillion have a huge black hole in their final salary pension schemes (not in any other scheme). In 1996 their final salary pension pot stood at +127%. That is a healthy, well invested surplus. In 1997, chancellor Gordon Brown raided private company pension schemes for about £120 BILLION. They charged a tax levy, changed tax rules and - at the time of the next valuation - Carillion's final salary pension was nearly £1 billion in deficit. They had not changed their investment strategy and their returns were consistent to what they were before. Pension funds are quite well protected from their own companies, but not government. It wasn't the Carillion directors who stole the staff pensions.

My wife is really upset by what has happened, and I suspect I am much closer to it than anyone else on this forum. It is annoying when people spit out opinions when they do not know the facts, so much of the stuff I've seen on TV isn't even credible.

Rant over, and I'm not having a go at you, Master. I won't be getting into any sort of debate about this on the internet, because there is no value in doing so.

Great Post X. @Master , you should take note mate. It's easy to go on a big idealistic crusade without all the facts. There are many people responsible for what has happened here and there are many HYPOCRITES as well.
I also believe that The pressure they are put under to win some of these large Government contracts and penalties are why they make losses on projects. Yet it is the Banks, Financial Institutions and Government that have allowed Carrillion to rack up such a massive debt. There's a lot more to this scandal than a few directors walking off into the sunset with a few grand!
also , these contracts are still gonna have to be completed, and the big guns will queue up to bid, and then they will be under the same pressures and probably rack up a shit load of debt and cave in as well.

You should stop telling Master what to do. Maybe it's just me but you come across as incredibly patronising most the time yourself Primo.

@Beanz , and YOU should stop telling me what to do! Talk about pot calling the kettle black ffs!
He made a load anti Capitalism crusade comments without knowing what the fuck he was talking about apart from copying and pasting journalism from one side of the issue.
What the fuck happened to balance?
I have no clue what the fuck you do, nor do I particularly give a shit, but I am heavily involved in this industry and so are some people very close to me who have been affected.
So instead of the predictable “blame the fat cat bosses” cries, realise that it is far deeper than that.

Want to start off by saying I am really glad that you still miss Ross ( how long has that been now? ) Turns out Master may have had an idea what he was talking about, even if was a lazy c*nt as usual and copy and pasted a load of stuff.

I get what you are saying about balance but that cut's both ways. I am sorry if Carillion's collapse has affected you or people close to you, it seems that it has affected many small business across the country. I know as a self employed person running a small business how much impact big corporations either dragging their feet or simply refusing to pay invoices can be from personal experience.

[Master]

Bonus payments to directors and former executives at collapsed construction giant Carillion have been stopped.

The move came amid political anger about bumper payments to executives who had been in charge as the firm headed for the rocks. The Insolvency Service said payments, including those included in severance packages for former executives, had been halted after the firm went into liquidation on Monday...

At Prime Minister’s Questions, Labour leader Jeremy Corbyn lashed out at the “wildly excessive” bonuses paid to directors.

Carillion’s former chief executive Richard Howson pocketed £1.5m in salary, bonuses and pension payments during 2016 and, as part of his departure deal, Carillion agreed to keep paying him a £660,000 salary and £28,000 in benefits until October.

Former finance chief Zafar Khan, who left Carillion in September, was due to receive £425,000 in base salary for 12 months.

Interim chief executive Keith Cochrane was due to be paid his £750,000 salary until July, despite leaving the company in February...The Prime Minister said the Official Receiver’s investigation into the firm would “look into the conduct not just of current directors but also of previous directors and their actions”.

It was possible to take action to claw back bonuses that have already been paid, she indicated. “The Official Receiver does have the power to ensure that, in reviewing payments to executives, where those payments are unlawful or unjustified he can take action to recover those payments,” the Prime Minister said.

https://www.theguardian.com/business...-business-live

[Primo Carnera]

Master, mate, you need to be in possession of the full facts.

I know Carillion extremely well indeed on a first hand basis.

I have set up and run Joint Ventures with them, have competed against them in bids, have bought and sold businesses to them, have taken over contracts from them, and have dealt with them when they have taken over contracts from us. I have TUPE transferred staff from them and to them. I have poached their staff and they have poached mine. I have many friends who work for them. My wife also worked directly for Carillion very recently indeed, for many years.

As usual, journalists who do not have a clue are offering simplified reporting and viewpoints which are prejudiced by their own beliefs. Equally, on this very forum, we have had people conveniently cherry picking stuff to add to their already formed world view.

It is true that Carillion's directors have failed, and should not be rewarded for that failure. The 'golden parachutes' awarded for failure are just wrong and should not have been made. If it is true, as has been reported, that the remuneration board changed the bonus rules in 2015, again that should be investigated. Note, though, that nobody on that Board is a Carillion employee. The head of it is the HR Director of Tesco. Why is nobody asking the non-executive directors these questions. They are the ones who have also actually failed because their role is governance and to provide outside perspective.

The vultures at EY are now making millions by running the liquidation. But it was KPMG who signed off the accounts every year, earning hundreds of thousands of pounds. When EY fuck up somebody else's accounts, KPMG will Be the liquidators and earn millions. Why is nobody challenging this cosy and illegal cartel?

The reasons the company went bust are complex, but essentially it boils down to them being too aggressive in how they book cash and profit. They booked profit every year on long term contracts when the actual profit was unclear. I have known this for a fact for over 5 years. This was driven by their demanding shareholders ..... 72% of whom are banks.

Nobody comes out of this well.

Carillion's directors have clearly failed. They then ended up in a Ponzi like scheme where they 'bought' shit new contracts in an attempt to mask underlying long term losses. Their middle management are guilty of being complicit in the whole shambles for many years and taking undeserved bonuses too. Accountants are guilty of overstating cash and profit. Carillion staff are also bonused, they were happy to take the bonuses. Their competitors are guilty of joining the race to the bottom in terms of bidding for work with little or no margin possibility.

The government are acting all pious and surprised. However, two thirds of Carillion's work was with the government. Government contracts are not particularly profitable, but do provide reliable cashflow. PFI and PPP contracts are now weighted firmly in favour of the government, with margins usually in the 2.5 to 3% region, which is not blatant profiteering. The government knew Carillion were in trouble and needed cash, so they aggressively negotiated new and existing contracts in their favour. My wife's public sector customer regularly applied penalties to Carillion, which resulted in the contract being permanently loss making. Her customer said 'we need the money as our budgets have been cut and you're a big enough business. Oh, and by the way, if you don't agree to do this extra work for free, I will just make sure I get it back next month in penalties anyway.' Her customer was shambolic, and wasteful in the way they ran their own business.

Terrible customers, who believe that the company was a magic money tree.

Central government say that they will not bail out a private company for the benefit of shareholders ..... unless its a bank, eh! And it is those banks that ultimately drove the company into liquidation.

The Opposition are jumping onto the bandwagon to make this a case for broader nationalisation, because public services should be delivered by a public sector with a public sector ethos. That's a joke, it was two thirds of Carillion's customers who helped make them bankrupt by being awful customers. Great ethos.

Anybody close has known for at least 5 years that the company was in trouble, including all of the above. But now everybody is acting surprised. Hypocrisy at its best.

incidentally, I have to pull you on your comment about directors stealing people's pensions. Carillion have a huge black hole in their final salary pension schemes (not in any other scheme). In 1996 their final salary pension pot stood at +127%. That is a healthy, well invested surplus. In 1997, chancellor Gordon Brown raided private company pension schemes for about £120 BILLION. They charged a tax levy, changed tax rules and - at the time of the next valuation - Carillion's final salary pension was nearly £1 billion in deficit. They had not changed their investment strategy and their returns were consistent to what they were before. Pension funds are quite well protected from their own companies, but not government. It wasn't the Carillion directors who stole the staff pensions.

My wife is really upset by what has happened, and I suspect I am much closer to it than anyone else on this forum. It is annoying when people spit out opinions when they do not know the facts, so much of the stuff I've seen on TV isn't even credible.

Rant over, and I'm not having a go at you, Master. I won't be getting into any sort of debate about this on the internet, because there is no value in doing so.

Great Post X. @Master , you should take note mate. It's easy to go on a big idealistic crusade without all the facts. There are many people responsible for what has happened here and there are many HYPOCRITES as well.
I also believe that The pressure they are put under to win some of these large Government contracts and penalties are why they make losses on projects. Yet it is the Banks, Financial Institutions and Government that have allowed Carrillion to rack up such a massive debt. There's a lot more to this scandal than a few directors walking off into the sunset with a few grand!
also , these contracts are still gonna have to be completed, and the big guns will queue up to bid, and then they will be under the same pressures and probably rack up a shit load of debt and cave in as well.

You should stop telling Master what to do. Maybe it's just me but you come across as incredibly patronising most the time yourself Primo.

@Beanz , and YOU should stop telling me what to do! Talk about pot calling the kettle black ffs!
He made a load anti Capitalism crusade comments without knowing what the fuck he was talking about apart from copying and pasting journalism from one side of the issue.
What the fuck happened to balance?
I have no clue what the fuck you do, nor do I particularly give a shit, but I am heavily involved in this industry and so are some people very close to me who have been affected.
So instead of the predictable “blame the fat cat bosses” cries, realise that it is far deeper than that.

Want to start off by saying I am really glad that you still miss Ross ( how long has that been now? ) Turns out Master may have had an idea what he was talking about, even if was a lazy c*nt as usual and copy and pasted a load of stuff.

I get what you are saying about balance but that cut's both ways. I am sorry if Carillion's collapse has affected you or people close to you, it seems that it has affected many small business across the country. I know as a self employed person running a small business how much impact big corporations either dragging their feet or simply refusing to pay invoices can be from personal experience.

The Ross thing was a bet with Master , which I was happy to honour, and come to think of it I have no clue what timescale was put on it, although I do miss the prick!
To be fair, I haven’t been hit by this yet and don’t want to sound all self pitying because I’m not directly affected. My point was that anybody is going to be affected one way or another , and in my opinion, it’s probably going to happen again.
I think the whole Construction industry needs to be looked at because at the moment we are merely papering over the cracks , yet some people think they’re kings of the World one minute and crying and bankrupt the next and blaming the World and sundry.

[Master]

Parenting over the cracks

You can change your signature yourself anytime you want, just thought you did miss Ross. You had some good battles with him.