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96-618: Following accounting irregularities at companies such as Carillion , Patisserie Valerie and BHS , the UK government ordered a review of the current supervisory environment by the Financial Reporting Council (FRC). The review was led by Legal & General chairman Sir John Kingman . The review recommended the urgent introduction of a new regulator, the Audit, Reporting and Governance Authority , which should be accountable to Parliament, with

192-740: A Swiss Verein to a co-operative under Swiss law in 2003 and to a limited company in 2020. This structure in which the Limited company provides support services only to the member firms is similar to other professional services networks . The member firms provide the services to the client. The purpose is to limit the liability of each independent member. KPMG's global chairman is Bill Thomas, former senior partner and CEO of Canadian member firm KPMG LLP. Some KPMG member firms are registered as multidisciplinary entities that also provide legal services in certain jurisdictions. In India , where regulations do not permit foreign auditing firms to operate, KPMG

288-583: A "a small number of redundancies" in its construction and projects team as a result of Carillion's collapse. The impacts of Carillion's collapse extended over a year: in January 2019, construction equipment hirer Hawk Plant went into administration after losing around £800,000 from the collapse of Carillion and a problem contract in Sierra Leone; also in January 2019, piling contractor Van Elle reported pretax profits down 54% to £2.4M as turnover fell 18% to £42.9M in

384-406: A $ 400 million fraud took action against KPMG with regard to its refusal to honor a February 2016 court order to produce Chinese working papers, correspondence, and records to the liquidators. The liquidators are asking that 91 defendants be held in contempt of court , which could result in criminal penalties, or weekly fines. KPMG had issued written audit reports for CMED from 2003 to 2008, and

480-597: A 'smokescreen' for its own poor payment record. Four companies in Lagan Construction Group went into administration owing £21M in early March 2018 partly as a result of Carillion's insolvency; tightened credit terms and requests for upfront payments had affected cashflow. Similarly, 55-strong Chippenham-based flooring contractor Polydeck blamed Carillion "tailwinds" after it went into administration on 25 May 2018. Cheshire-based civil engineering contractor D G Cummins lost £1.8M owed by Carillion for work undertaken on

576-773: A 60% stake in Rokstad Power Corporation, a Canadian transmission and distribution business, for £33M. Carillion acquired 100% of the Outland Group, a specialist supplier of camps and catering at remote locations in Canada, in May 2015 and a majority stake in Ask Real Estate, a Manchester -based developer, in January 2016. In 2009, Carillion was revealed as a subscriber to an illegal construction industry blacklisting body, The Consulting Association (TCA), though its inclusion on

672-758: A Carillion subcontract at the Midland Metropolitan University Hospital . On 29 January 2018, CCP, a Slough -based dry lining contractor with a 350-strong site-based labour force, called in liquidators due to debts owed by Carillion. Already financially troubled ground engineering business Aspin Group Holdings went into administration in February 2018 as part of pre-pack deal after the group and its subsidiaries were owed around £800,000 by Carillion (bought by private equity firm Sandton Capital Partners, Aspin subsequently went into administration, with

768-414: A fifth on the same period in 2017, with small to medium-sized companies and specialist subcontractors particularly hard hit, having to write off virtually everything owed to them by Carillion. Total construction insolvencies in 2018 were up 13% to 2,954 companies, according to law firm Nockolds, who said fallout from Carillion's collapse had contributed to a spike in businesses folding. Law firm RPC made

864-549: A former KPMG LLP partner in charge of KPMG's US Los Angeles-based Pacific Southwest audit practice, admitted passing on stock tips about clients, including Herbalife , Skechers , and other companies, to his friend Bryan Shaw, a California jewelry-store owner. In return Shaw gave London $ 70,000 as well as gifts that included a $ 12,000 Rolex watch and concert tickets. On 6 May, Shaw agreed to plead guilty to one count of conspiracy to commit securities fraud . He also agreed to pay around $ 1.3 million in restitution, and to cooperate with

960-635: A grouping of independent national practices to create a strong European-based international firm. Deutsche Treuhand-Gesellschaft CEO Reinhard Goerdeler (son of leading anti-Nazi activist Carl Goerdeler , who would have become Chancellor if Operation Valkyrie had succeeded) became the first CEO of KMG. In the United States, Main Lafrentz & Co. merged with Hurdman and Cranstoun to form Main Hurdman & Cranstoun. In 1987, KMG and Peat Marwick joined forces in

1056-818: A legal ruling that the group's collapse did not warrant "special circumstances" protection. In January 2019, Unite reported that worker redundancy payment negotiations had been made "unduly complicated" because of Carillion's complex corporate structure, and said the total amount of redundancy pay awarded to ex-Carillion workers was expected to rise to £65M. A week after the liquidation, PwC agreed with Network Rail that Carillion Construction employees to its projects would have their wages guaranteed through to at least mid April 2018, while Carillion suppliers on Network Rail projects would also be paid. 150 Carillion workers employed on smart motorway joint ventures with Kier were set to become Kier employees; 51 Carillion employees working on seven HS2 civil engineering packages awarded to

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1152-568: A locally managed liquidation. By the end of 2018, 91 Carillion companies had been liquidated. In April 2018, the Official Receiver estimated the total liabilities of the then 27 liquidated UK companies at £6.9 billion, a figure over three times higher than given in the Group's accounts at the end of 2016. On 6 August 2018, the Insolvency Service announced the end of the trading phase of

1248-487: A merger with rival Balfour Beatty . Three offers were made; the last bid, which valued Balfour Beatty at £2.1 billion, was unanimously rejected by the Balfour Beatty board on 19 August 2014. Balfour refused to allow an extension of time for negotiations that could have prompted a fourth bid. Carillion announced later that day that it would no longer pursue a merger with its rival. In December 2014, Carillion acquired

1344-501: A new CEO led to the appointment of Andrew Davies , CEO of Wates – announced on 27 October 2017 – with Davies set to join the firm in April 2018). As a result, the contractor was demoted from the FTSE 250 Index , and five directors (including Howson and finance director Zafar Khan ) left the company as it tried to refinance. On 27 September 2017, a Middle Eastern firm was said to be considering

1440-456: A partnership with Alphabet's Google Cloud . This is an attempt to leverage Google products in the workplace, develop AI agents and overall make the workforce familiar with the technology. Each national KPMG firm is an independent legal entity and is a member of KPMG International Limited, a UK Limited Company incorporated in London, United Kingdom. KPMG International changed its legal structure from

1536-683: 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. Carillion was created in July 1999, following a demerger from Tarmac , which had been founded in 1903. Tarmac focused on its core heavy building materials business, while Carillion included

1632-467: A rescue deal agreed, with a potential administration process set to start on 15 January 2018. The Financial Times later reported Carillion had just £29M in cash when it collapsed, and would have run out of cash by 18 January 2018. Consultants PricewaterhouseCoopers (PwC) and EY had both rejected roles as administrators amid concerns they would not be paid. On 15 January 2018, the BBC reported Carillion

1728-404: A takeover bid. Two days later, it was revealed that Carillion's losses for the six months ended 30 June 2017 totalled £1.15 billion, following a further write down of £200M relating to its support services division. In September 2017 Keith Cochrane told investors that the business had accepted too many projects which turned out unprofitable and for which the amount paid was insufficient for

1824-404: A training contract with a government department or agency. In June 2018, 776 out of 1148 had been re-employed or moved into full-time education, 225 were seeking future work and 147 had become disengaged. Construction apprentices made up 341 of the 356 people made redundant in the week reported on 30 July; Unite said these redundancies reduced UK construction apprenticeship numbers by 1.6%, while

1920-429: Is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years. [...] In recent days however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision. We understand that HM Government will be providing the necessary funding required by the Official Receiver to maintain

2016-779: Is licensed as an investment bank and carries out audits under the name of BSR & Co, an auditing firm KPMG purchased after the 1992 liberalisation of the Indian economy . During March 2022, in response to the Russian invasion of Ukraine , KPMG announced that their Russian and Belarusian firms would leave the KPMG network. KPMG is organised into the following three service lines that generated $ 36 billion in revenue (the 2023 revenue shares are listed in parentheses): Tax arrangements relating to tax avoidance and multinational corporations and Luxembourg which were negotiated by KPMG became public in 2014 in

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2112-516: The Investors Chronicle commented that its financial problems were not a secret and had been known for at least two years, with little working capital, shrinking amounts due to customers, and rising monies withheld by clients. On 24 October 2017, it was reported that Carillion was preparing to sell its healthcare facilities management business to Serco (the deal included 15 contracts, with annual revenues of approximately £90M for which Serco

2208-560: The Building Engineering Services Association and the Electrical Contractors' Association found that 80 of them were collectively owed £30 million by Carillion, an average exposure of £375,000. Average debts owed to micro businesses (fewer than 10 employees) were £98,000; medium-sized businesses (50 to 249 employees) were owed on average £236,000, with the most exposed firm owed almost £1.4M. Only £31M of

2304-501: The Isle of Man . KPMG US terminated five partners in its audit practice, including the head of its audit practice in the US, after an investigation of advanced confidential knowledge of planned audit inspections by its Public Company Accounting Oversight Board (PCAOB). This followed criticism about KPMG's failure to uncover illegal sales practices at Wells Fargo or potential corruption at FIFA ,

2400-448: The M6 motorway widening contract junctions 16–19, and, facing a £600,000 tax demand, had to file a notice of intent to enter administration, endangering 50 jobs. In October 2018, a report from accountant Moore Stephens said Carillion's liquidation had triggered a 20% spike in the number of UK building firms becoming insolvent: 780 companies fell into insolvency in the first quarter of 2018, up

2496-686: The Madoff " Ponzi scheme ". Class action suits were filed. In August, it was reported by the Swedish Financial Supervisory Authority to the Swedish accountancy regulator after HQ Bank was forced into involuntary liquidation after the Financial Supervisory Authority revoked all its licences for breach of banking regulations. In August, KPMG conducted due diligence work on Hewlett-Packard 's $ 11.1 billion acquisition of

2592-682: The Midland Metropolitan University Hospital (where 70 Carillion staff lost their jobs) in Birmingham, with the project 18 months late and likely to cost an additional £125M. However, in June 2018, banks financing the project withdrew their support, and HM Treasury cancelled the PFI contract for construction of the hospital, leaving the NHS Trust to search for new investment and pushing the completion date back to at least 2022. Market testing with contractors showed there

2688-648: The National Audit Office , £2.6bn in pension liabilities have to be covered by the Pension Protection Fund . Carillion operated 13 UK defined benefit pension schemes with 27,000 members. Following the liquidation, 12 of these schemes entered a Pension Protection Fund assessment period. In January 2018, the contracts previously awarded to Carillion for smart motorway projects were taken on by Kier Group. Rival contractors looked to take over Carillion's two major hospital PFI projects. Skanska targeted

2784-638: The Specialist Engineering Contractors Group said Carillion's failure "could lead to many smaller firms going under". Up to 30,000 small businesses were reportedly owed money by Carillion, who used 'delay tactics' and withheld payments to suppliers, sometimes for up to 120 days. Within 24 hours, equipment hire firm Speedy Hire and piling contractor Van Elle were reporting potential losses of £2M and £1.6M respectively; Van Elle also reported uncertainty relating to £2.5M worth of future work for Network Rail. A survey of 133 companies by

2880-906: The facilities management services sector. In September 2001, Carillion acquired the 51% of GT Rail Maintenance it did not already own, thereby creating Carillion Rail. Carillion Rail carried out track renewals on the rail network , and contract work for Network Rail . In August 2002, Carillion bought Citex Management Services for £11.5M and, in March 2005, it acquired Planned Maintenance Group for circa £40M. After that, Carillion went on to acquire two more United Kingdom support services firms: Mowlem , for circa £350M in February 2006, and Alfred McAlpine , for £572M in February 2008. Then, in October 2008, Carillion bought Vanbots Construction in Canada for £14.3M. Carillion bought Eaga , an energy efficiency business, for £306M in April 2011. However, by December 2011

2976-737: The American Audit Co. in New York. In 1923, The American Audit Company was renamed FW LaFrentz & Co. In about 1913, Frank Wilber Main founded Main & Co. in Pittsburgh . In March 1917, Piet Klijnveld and Jaap Kraayenhof opened an accounting firm called Klynveld Kraayenhof & Co. in Amsterdam. In 1925, William Barclay Peat & Co. and Marwick Mitchell & Co., merged to form Peat Marwick Mitchell & Co. In 1963, Main LaFrentz & Co

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3072-563: The British software company Autonomy . In November 2012 HP announced an $ 8.8 billion write off due to "serious accounting improprieties" committed by Autonomy management prior to the acquisition. According to an independent panel formed to investigate irregular payments made by Olympus which reported in December, KPMG's affiliate in Japan did not identify fraud at the company. In April, Scott London,

3168-795: The CEK joint venture were offered the opportunity to join Kier/ Eiffage . Nationwide Building Society took on around 250 former Carillion employees engaged in facilities management work at its offices and branches. Around 1,000 Carillion staff engaged on prison facilities management work for the Ministry of Justice were transferred to a new government-owned company, 22 workers from Carillion's power network business joined J Murphy & Sons , around 60 staff at Carillion's Newcastle-based legal services arm joined Clifford Chance , and 700 employees engaged on Network Rail projects transferred to Amey Rail; Amey paid

3264-462: The Insolvency Service. In November 2019, the liquidators said they were reportedly close to clawing back around £510M from asset sales, insurance and debt recoveries. The liquidation announcement had an immediate impact on 30,000 subcontractors and suppliers, Carillion employees, apprentices and pensioners, plus shareholders, lenders, joint venture partners and customers in the UK, Canada and other countries. Subcontractors were said to be vulnerable:

3360-566: The Milburngate development in Durham . In a further profit warning, on 17 November 2017, Carillion said it would breach banking covenants the following month, with full year debts set to reach up to £925M. A recapitalisation plan was to be implemented in early 2018. The company's share price fell over 50% in early trading to just 18p – valuing the business at £73M. Unite the Union sought urgent talks with

3456-466: The NHS Trust revealed that the cost of rectifying serious faults, including replacing non-compliant cladding installed by Carillion, was holding up plans to restart and finish the £350M project; with the project further delayed, the Trust was considering invoking a break clause to terminate the PFI contract. On 24 September 2018, it was reported that the government would step in to terminate the PFI deal, taking

3552-535: The Netherlands is the only country with two members of KPMG International: KPMG Audit (accountants) and Meijburg & Co (tax consultants). In 1991, the firm was renamed KPMG Peat Marwick, and in 1999, the name was reduced again to KPMG. In October 1997, KPMG and Ernst & Young announced they would merge. However, while the merger to form PwC was granted regulatory approval, the KPMG/Ernst & Young tie-up

3648-502: The Official Receiver announced an initial 377 redundancies; a further 994 redundancies were announced during February, 337 in March, 554 in April, 75 in May, 43 in June, 399 in July, and 9 in August, bringing the redundancy total by this date to 2,787 – 15% of the pre-liquidation workforce. In parallel, 13,945 jobs had been safeguarded through transfers (76% of the pre-liquidation workforce), while 1,274 employees left

3744-549: The Official Receiver established a specialist team and said former staff should receive the necessary information within seven days of being made redundant or transferring to a new employer. In July 2018, Unite launched legal action on behalf of 27 members made redundant at GCHQ in Cheltenham claiming proper consultation had not taken place; in July 2021, on behalf of 263 members seeking compensation over Carillion's failure to inform and consult them on redundancy terms, Unite secured

3840-412: The Official Receiver £2.1M for Carillion's rail contracts. French engineering group Egis took on Carillion's M40 upkeep motorway contract, safeguarding the jobs of around 95 Carillion workers. Carillion Welding was acquired by Rail Safety Solutions Ltd, saving 63 jobs. However, the transfer of some overseas-born staff to new employers was hampered by strict application of immigration rules that required

3936-599: The UK Government had significantly reduced the feed-in tariffs for green energy and Carillion had to rationalise the business. In December 2012, it acquired a 49% interest in The Bouchier Group, a company providing services in the Athabasca oil sands area, for £24m. Then, in October 2013, the company bought the facilities management business of John Laing . In August 2014, the company spent several weeks attempting

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4032-509: The UK by the end of 2013. KPMG agreed to pay $ 125 million and $ 75 million to settle lawsuits stemming from the firm's audits of Rite Aid and Oxford Health Plans Inc., respectively. KPMG agreed to pay $ 115 million to settle lawsuits stemming from the collapse of software company Lernout & Hauspie Speech Products NV. During August, KPMG LLP admitted to criminal wrongdoing and agreed to pay US$ 456 million in fines, restitution, and penalties as part of an agreement to defer prosecution of

4128-572: The United Kingdom, Germany, Switzerland and Liechtenstein merged to form KPMG Europe LLP in October 2007. These member firms were followed by Spain , Belgium , the Netherlands , Luxembourg , CIS ( Azerbaijan , Russia , Ukraine , Belarus , Kyrgyzstan , Kazakhstan , Armenia and Georgia ), Turkey , Norway , and Saudi Arabia . They appointed joint Chairmen, John Griffith-Jones and Ralf Nonnenmacher. In 2020, KPMG International Limited

4224-641: The balance sheet for a potential large fine (up to £1 billion) arising out of the Carillion lawsuit. In April 2022, it was announced that KPMG will acquire 50% of the UK-based venture capital advisory specialist Acceleris subject to approval from the Financial Conduct Authority. In August 2022, KPMG announced plans to downsize its office footprint in New York City in 2025, when it moves its offices in

4320-465: The business through finding new work, retirement or for other reasons; a year after the liquidation, the total number of redundancies was reported as 3,038. Around £50M in redundancy payments had been paid up to September 2018, with the final bill likely to reach £65M. After staff made redundant claimed PwC did not provide information necessary for them to claim redundancy pay and statutory notice pay, causing financial hardship and threatening mortgages,

4416-468: The city from Midtown Manhattan to Two Manhattan West in Hudson Yards . In May 2024, KPMG partners approved the merger of its UK and Switzerland firms, which are working across audit, legal, tax, and advisory, and generating $ 4.4 billion annually. In November 2024, KPMG announced that it would spend $ 100 million over the next four years  to boost its enterprise artificial intelligence services via

4512-480: The company's extended supplier payment terms and its use of ' reverse factoring ', argued Carillion was more leveraged than it reported, and predicted a "profit shortfall" was likely. By October 2015, Carillion had become hedge funds ' most popular share to ' sell short ' as analysts questioned the lack of growth and rising debt. From having less than 5% of its shares shorted at the beginning of 2015, over 20% of Carillion shares were on loan to hedge funds by June 2016;

4608-455: The company's road maintenance and facilities management contracts. Canadian FM firm BGIS, a subsidiary of Brookfield, negotiated to take on 2,500 workers engaged on UK hospital, education, justice, transport and emergency services contracts, but the negotiations failed on 8 March 2018. Out of nearly 1200 apprentices affected by Carillion's liquidation, around a third – 419 – were still without work in early April 2018; only two had been offered

4704-472: The company's share price fell 19% over the same period. On 10 July 2017, a Carillion trading update highlighted a £845M impairment charge in its construction services division, mainly relating to three loss-making UK PFI projects and costs arising from Middle East projects. Chief executive Richard Howson (appointed CEO in December 2011) stepped down but was retained as operations director, with Keith Cochrane temporarily becoming CEO (Carillion's search for

4800-489: The company, concerned about the future of around 1,000 Carillion workers plus others employed by subcontractors and agencies. Major shareholder Kiltearn Partners halved its shareholding incurring a loss of over £40M. On 20 December, Carillion announced it had brought forward the arrival of new CEO Andrew Davies to 22 January 2018. On 3 January 2018, it was reported that the UK Financial Conduct Authority

4896-637: 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

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4992-531: The contractor to complete the project. More than a year later, in November 2019, the defective cladding issue remained unresolved. In March 2020, the hospital NHS Trust revealed it was drawing up claims against Carillion's insurers and a Carillion subcontractor, Heyrod Construction. A delayed National Audit Office report into the government's handling of the Midland Metropolitan and Royal Liverpool hospitals

5088-553: The contractor, the total cost to the taxpayer would be very similar to the original plan. A follow-up investigation into the hospitals projects by the Public Accounts Committee was postponed in May 2020 due to the COVID-19 pandemic in the United Kingdom . The Lincoln eastern bypass project, originally awarded by Lincolnshire County Council to Carillion, was taken over by Galliford Try , adding £24M in costs and delaying

5184-427: The cost of work done ("we were building a Rolls-Royce but only getting paid to build a Mini "), and its management structure and internal organisation had been over-complex and lacking sufficient regard to contractual risk assessment and overly optimistic assumptions; as a result, the company had "burned through cash" trying to deliver to a high standard without assessing the possible implications. In September 2019,

5280-506: The council faced rising fees imposed by PwC. Tameside also faced a £5M bill to repair problems arising from a £2.7M school refurbishment project carried out by Carillion before it collapsed. KPMG KPMG International Limited (or simply KPMG ) is a multinational professional services network , and one of the Big Four accounting organizations, along with Ernst & Young (EY), Deloitte , and PwC . The name "KPMG" stands for "Klynveld Peat Marwick Goerdeler". The initialism

5376-465: The estimated £1bn-plus owed by Carillion was covered by trade credit insurance. In late March 2018, Bury North MP James Frith hosted a meeting in Parliament attended by suppliers affected by Carillion's collapse; companies highlighted unpaid debts of between £250,000 and £2.7M. In August 2018, building services specialist NG Bailey announced a £2.2M exceptional loss for irrecoverable costs arising from

5472-738: The financial statements of British aerospace company, Rolls-Royce plc for the year ended December 2010. In August, KPMG US paid a $ 6.2 million fine to the US Securities and Exchange Commission for inadequacies in its audit of the financial statements of oil and gas company, Miller Energy Resources. It also found KPMG guilty of a long list of violations with regard to its audits, including "lack of competence" and "highly unreasonable conduct." In November, 91 partners of KPMG Hong Kong faced contempt proceedings in Hong Kong High Court , as China Medical Technologies (CMED) liquidators investigating

5568-538: The firm he worked for changed its name to Robert Fletcher & Co. William Barclay Peat joined the firm in 1870 at 17 and became head of the firm in 1891, renamed William Barclay Peat & Co. by then. In 1877, Thomson McLintock founded Thomson McLintock & Co in Glasgow. In 1897, Marwick Mitchell & Co. was founded by James Marwick and Roger Mitchell in New York City . In 1899, Ferdinand William LaFrentz founded

5664-674: The firm, according to the US Justice Department and the Internal Revenue Service. In addition to the agreement, nine individuals-including six former KPMG partners and the former deputy chairman of the firm were to be criminally prosecuted. As alleged in a series of charging documents, the fraud relates to the design, marketing, and implementation of fraudulent tax shelters. American real estate financing firm Fannie Mae sued KPMG for malpractice for approving years of erroneous financial statements . In February, KPMG Germany

5760-419: The first mega-merger of large accounting firms and formed a firm called KPMG in the United States and most of the rest of the world and Peat Marwick McLintock in the United Kingdom. In the Netherlands, due to the merger between PMI and KMG in 1988, PMI tax advisors joined Meijburg & Co. (The tax advisory agency Meijburg & Co. was founded by Willem Meijburg, Inspector of National Taxes, in 1939). Today,

5856-481: The former Tarmac Construction contracting business and the Tarmac Professional Services group of businesses. At the time of demerger Sir Neville Simms was appointed executive chairman of the business. Simms stood down from his executive responsibilities in January 2001 but remained non-executive chairman until May 2005 when Philip Rogerson took over the chair. The name 'Carillion', a corruption of

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5952-523: The governing international body of football. It was reported in 2017 that KPMG had the highest number of deficiencies, among the Big Four , cited by its regulator in the previous two years. This includes two annual inspections that were compromised as a result of advanced access to inspection information. In March 2019, David Middendorf and Jeffrey Wada, co-defendants in the scandal, were convicted. The UK accounting regulator, Financial Regulation Council (FRC), has opened an investigation into KPMG's audit of

6048-504: The government as part of a plea deal with federal prosecutors. This scandal led KPMG to resign as auditor for Herbalife and Skechers. KPMG was accused by the Canada Revenue Agency of abetting tax evasion schemes: "The CRA alleges that the KPMG tax structure was in reality a 'sham' that intended to deceive the taxman." The Canada Revenue Agency offered an amnesty to KPMG clients caught using an offshore tax-avoidance scheme on

6144-494: The government said the CITB had found new paid employment for 777 former Carillion apprentices. On 31 July 2018, The Guardian highlighted the matter: Unite assistant general secretary Gail Cartmail said: "This is an appalling way to treat these apprentices who should have become the backbone of the industry. To dump them and to destroy their training is an act of crass stupidity." In April 2018, Carillion's Wolverhampton headquarters

6240-465: The hospital into full public ownership, meaning a £180M loss for private sector lenders Legal & General and the European Investment Bank . This was confirmed on 26 September 2018, with completion of the hospital in 2020 (later delayed to autumn 2022) likely to cost an additional £120M, due to unforeseen issues left behind by Carillion. On 26 October 2018 Laing O'Rourke was confirmed as

6336-593: The intention to provide more effective oversight and address a concentration in the industry - the Big Four audit firms' market share with FTSE350 firms being 98% at the time of the report. In March 2019 Business Secretary Greg Clark announced he would implement the recommendation from the Kingman Review in 2019. Plans for the new regulator were included in the September 2019 Queen's Speech and, despite concerns that

6432-519: The launch of ARGA might be delayed, the Department for Business, Energy and Industrial Strategy (BEIS) told Accountancy Daily in February 2020 that "next steps on audit reform" would be taken in the first quarter of 2020. However, further details were slow to emerge; in November 2020 City A.M. reported that reform proposals relating to the audit sector were expected in early 2021 with full implementation expected in 2023. A UK Government policy paper, Restoring trust in audit and corporate governance ,

6528-413: The liquidation, described by the Official Receiver as "the largest ever trading liquidation in the UK". Work on finalising Carillion's trading accounts and payments to suppliers, and investigations into the cause of the company's failure, including the conduct of its directors, continued. In December 2018, it was reported that former Carillion directors Philip Green and Richard Howson had been interviewed by

6624-402: The list was mainly due to its previous ownership of Crown House Engineering (acquired by Laing O'Rourke in 2004), and previous use of TCA by Mowlem (acquired by Carillion in 2006). Carillion made two voluntary submissions to the House of Commons' Scottish Affairs Select Committee , one in September 2012, and another in March 2013, relating to its involvement with TCA. In July 2014, Carillion

6720-480: The loss of 200 jobs, in July 2019). On 23 March 2018, 160-strong mechanical and electrical subcontractor Vaughan Engineering warned it faced administration after losing £650,000 on two Carillion projects; KPMG were subsequently appointed as administrators, making 83 employees in Broxburn , 43 in Newcastle and 28 in Warrington redundant. Vaughan collapsed owing £9.2M to its suppliers, though one supplier, Bmech, later claimed that Vaughan used Carillion's collapse as

6816-683: 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

6912-561: The new chair of the Financial Reporting Council, and would lead its transition into the Audit, Reporting and Governance Authority. However, he left the role in May 2020, citing conflicts between the part-time role and other positions he was interested in taking. In December 2021, Jan du Plessis was nominated by the UK Government to lead the FRC through its transformation into the ARGA. In February 2022, du Plessis

7008-416: The permanent role. In November 2021, KPMG UK was reported as having revised its partnership process to introduce five levels of partnership which required partners to inject capital at levels starting at £150,000 and going up to £500,000. This along with the £115 million proceeds from the sale of its pensions business earlier in 2021, which it seems was not distributed to the partners, was intended to prepare

7104-572: The project's completion by six months to May 2020. The redevelopment of the Vaux Breweries site in Sunderland resumed, after a six-month delay following Carillion's collapse, in July 2018, with Tolent as the main contractor. Tameside Council 's 'Vision Tameside' project east of Manchester was taken over by Robertson Construction, but rising costs for this and other former Carillion projects meant 18 major investment projects were put on hold, while

7200-675: The public services carried on by Carillion staff, subcontractors and suppliers. Six UK Carillion businesses, including Carillion plc and Carillion Construction Ltd, were liquidated in the first phase. On 19 January, Carillion (AMBS) Limited was placed in provisional liquidation, and on 25 and 26 January 2018 ten further UK companies went into liquidation. Another business went into liquidation on 2 February, followed by ten more on 16 February 2018. Two Carillion businesses in Jersey and Guernsey also went into liquidation, in January and March 2018 respectively. In June 2018, Carillion ( Qatar ) LLC went into

7296-579: The six months to 31 October 2018 – with its CEO blaming Carillion's collapse for the profit slump. In September 2019, Antrim -based electrical subcontractor Blackbourne ceased trading, making 86 staff redundant, partly due to Carillion debts incurred on the Royal Liverpool University Hospital project. At the time of liquidation Carillion employed 18,257 people in the UK. Liquidator PwC began staff consultations over planned redundancies and transfers to new employers. On 2 February 2018,

7392-567: The so-called Luxembourg Leaks . KPMG was the preferred employer among the Big Four accounting firms according to CollegeGrad.com. It was also ranked No. 4 on the list of "50 Best Places to Launch a Career" in 2009 according to Bloomberg Businessweek . It was reported in early 2012 that KPMG has about 11,000 staff in the UK and 9,000 in mainland China and Hong Kong. KPMG's global deputy chairman predicted that headcount in China would overtake that of

7488-533: 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

7584-408: The word ' carillon ' (a peal of bells), was intended to give the construction business a clearly defined, separate identity, and to distance it from its construction roots. It was proposed by London branding consultancy Sampson Tyrell (later Enterprise IG, part of WPP ). Under CEO John McDonough (formerly at Johnson Controls , and appointed Carillion CEO in January 2001), Carillion expanded into

7680-675: The workers to apply for permission to remain in the UK. MPs on the Home Affairs Select Committee , citing the case of Nigerian-born Hamza Idris, called on the Home Office to display flexibility and compassion, concerned that "scores" more workers might also be affected. In early February 2018, private equity groups Greybull Capital , Brookfield and Endless LLP were said to be interested in acquiring parts of Carillion that might be ringfenced for auction. On 8 February, PwC opened bidding for Carillion's rail division and several of

7776-570: Was chosen when KMG (Klynveld Main Goerdeler) merged with Peat Marwick in 1987. KPMG is a network of firms in 145 countries with 273,424 employees. It has three lines of services: financial audit , tax, and advisory . Its tax and advisory services are further divided into various service groups. Over the past decade, various parts of the firm's global network of affiliates have been involved in regulatory actions as well as lawsuits. In 1816, Robert Fletcher started working as an accountant and in 1839

7872-499: Was confirmed as the FRC's new chair. No further announcements have been made as to the timetable for establishing ARGA, despite continued concerns about lack of competition in the UK audit market. 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. Carillion

7968-602: 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, 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,

8064-533: Was formed by the merger of Main & Co and FW LaFrentz & Co. In 1969, Thomson McLintock and Main LaFrentz merged forming McLintock Main LaFrentz International and McLintock Main LaFrentz International absorbed the general practice of Grace, Ryland & Co. In 1979, Klynveld Kraayenhof & Co. (Netherlands), McLintock Main LaFrentz (United Kingdom / United States), and Deutsche Treuhand-Gesellschaft (Germany) formed KMG (Klynveld Main Goerdeler) as

8160-400: Was incorporated in London, England. In February 2021, KPMG UK appointed its first female leaders, replacing Bill Michael, who stepped aside after making controversial comments. Bina Mehta was asked to step in as acting UK chairman and Mary O'Connor took over Michael's executive responsibilities as acting senior partner in UK. In April 2021, O'Connor quit the firm after being passed over for

8256-626: Was investigated for ignoring questionable payments in the Siemens bribery case. In November 2008, the Siemens Supervisory Board recommended changing auditors from KPMG to Ernst & Young. In February, KPMG Mauritius was sued by a group of South African pensioners who lost millions when investing in Leaderguard Spot Forex (LSF), a foreign exchange investment scheme backed by KPMG and Denmark-based Saxo Bank . The suit against KPMG

8352-431: Was just for the portion lost during their involvement. In March, KPMG was accused of enabling "improper and imprudent practices" at New Century Financial , a failed mortgage company, and KPMG agreed to pay $ 80 million to settle suits from Xerox shareholders over manipulated earnings reports. In December, it was announced that two of Tremont Group 's Rye Select funds, audited by KPMG, had $ 2.37 billion invested with

8448-466: Was later abandoned. In 2001, KPMG spun off its United States consulting firm through an initial public offering of KPMG Consulting, which was rebranded BearingPoint . In early 2009, BearingPoint filed for Chapter 11 bankruptcy protection. The UK and Dutch consulting arms were sold to Atos in 2002. In 2003, KPMG divested itself of its legal arm, Klegal and KPMG sold its Dispute Advisory Services to FTI Consulting . KPMG's member firms in

8544-560: Was little appetite to bid under a private finance model, and that a PF2 bid would be over £100M more expensive and take six months longer. As a result, the NHS trust sought direct government funding, and on 16 August 2018, the government announced it would provide funding to complete the hospital. Laing O'Rourke negotiated about the Royal Liverpool University Hospital , but the project remained stalled. In early September 2018,

8640-897: Was one of eight businesses involved in the 2014 launch of the Construction Workers Compensation Scheme, though this was condemned as a "PR stunt" by the GMB union, and described by the Scottish Affairs Select Committee as "an act of bad faith". As one of the contributors to the scheme, Carillion reported in August 2016 "a non-recurring operating charge of £10.5M" representing the compensation and associated costs it expected to pay. In December 2017, Unite announced that it had issued High Court proceedings against 12 major contractors including Carillion. Concerns about Carillion's debt situation were voiced in March 2015 by UBS analyst Gregor Kuglitsch who highlighted

8736-414: Was published in January 2020. The report warned of possible further significant cost increases, particularly to rectify the badly built Liverpool project, and blamed Carillion for pricing the jobs too low to meet specifications. The two projects were expected to cost more than 40% more than their original budgets, and to be completed between three and five years late. However, due to effective risk transfer to

8832-403: Was published on 19 March 2021, consulting on its proposed steps to establish the ARGA and give it the formal duties, functions and powers it needs to be fully effective. In September 2021, the FRC's head of regulatory standards, Mark Babington said the ARGA would "commence in April 2023". In July 2019, Clark announced that Simon Dingemans , formerly CFO at GlaxoSmithKline , had been appointed as

8928-689: Was put up for sale for £3M. The building was not owned by Carillion; it had leased it for around £440,000 per annum after it had been bought by an unnamed private investor for £6.165M in January 2016. In July 2018, it was reported that the building had been sold (for an undisclosed sum). At this date, some 140 Carillion staff were still based at the building, working for PwC; over 320 staff had either left or been made redundant. Carillion-owned assets set for auction in July 2018 include 12 car parking spaces at Wolverhampton 's Molineux Stadium , and development land in Rowley Regis and Loughborough . According to

9024-621: Was to go into liquidation (as opposed to administration), the company having issued a notice to the London Stock Exchange "that it had no choice but to take steps to enter into compulsory liquidation with immediate effect". The notice anticipated an application to the High Court for PwC to be appointed as Special Managers, to act on behalf of the Official Receiver . Carillion chairman Philip Green (appointed in May 2014) said: This

9120-498: Was to investigate the timeliness and content of Carillion announcements from December 2016 regarding its financial situation. Ten days later, the BBC reported that the company had "a matter of days" to avoid collapse and that Carillion was the subject of "high level government meetings". These meetings continued throughout the weekend of 13–14 January – covering the company's £900M debts, a £580M pension deficit, and many ongoing contracts for government departments – but broke up without

9216-479: Was to pay £47.7M – later cut to £29.7M – with Carillion losing £1bn from the value of its order book), and was planning to dispose of its Canadian operations to help shore up its finances. A week later, it was announced Carillion was selling its interest in developer Ask Real Estate to West Midlands developers Richardsons Developments for £14M. In December 2017, the Richardsons also acquired Carillion's interest in

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