KPMG settles £1.3bn lawsuit with Carillion liquidator
Financial services firm KPMG has reached a settlement agreement brought by Carillion’s liquidators.
Builder Carillion employed 18,000 people in the UK when it collapsed into liquidation in January 2018 with liabilities of almost £7bn.
The £1.3bn lawsuit launched by Britain’s official receiver, focused on audits between 2014 and 2016. It claimed that KPMG missed “red flags” as it audited Carillion’s accounts. The firm was paid £29m to audit Carillion over 19 years and signed off on the company’s accounts nine months before its demise.
At the time, KPMG said that Carillion’s board and management were solely responsible for the failure as they set the strategy and ran operations and that the lawsuit was “without merit”.
KPMG’s UK chief executive Jon Holt has now said in a statement: “I am pleased that we have been able to resolve this claim. Carillion was an extreme and serious corporate failure, and it is important that we all learn the lessons from its collapse”.
The settlement comes after KPMG was fined £14.4m in July for its audits of Carillion and Regenersis and for providing “false and misleading” information to the regulator.
The long-awaited judgement by the Financial Reporting Council is one of the largest fines handed down for audit failings.
Four individuals have been fined and banned from practicing, by excluding them from membership of the ICAEW, and a junior employee reprimanded.
The FRC is still investigating former Carillion directors and KPMG.