KPMG and other leading accountancy firms face serious questions over their work with failed construction firm Carillion after making millions of pounds out of their relationships with the company, British lawmakers said on Tuesday. Lawmakers from two parliamentary committees examining the collapse of Carillion said that KPMG had earned 29.4 million pounds ($41 million) from auditing the contractor’s accounts since the company was founded in 1999.
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A day after the Bank of England hinted that it could raise interest rates faster than many expected, a run of economic figures on Friday suggest the British economy did not end 2017 as strongly as previously thought, the International New York Times reported on an Associated Press story. Official figures showed a 1.3 percent monthly decline in industrial production in December and a 4.9 billion-pound ($6.9 billion) trade deficit for goods and services, its worst since September 2016.
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The British government said on Thursday that another 101 jobs at Carillion Plc will be cut, as the fallout from Britain’s biggest corporate failure in a decade continues, Reuters reported. The Official Receiver, which manages insolvencies for the British government, said it safeguarded a further 1,221 jobs at the company but 101 roles have been made redundant. The jobs made redundant relate to back-office functions and engineering support roles that new suppliers no longer require, the statement said. So far 2,250 jobs have been saved and 930 job redundancies have been made.
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Britain’s J. Murphy & Sons Limited has bought Carillion’s UK power framework business for an undisclosed sum, the privately held engineering and construction company said on Wednesday. It will take over Carillion’s position on National Grid’s overhead electricity lines, substation and underground cable framework contracts and Carillion employees will join Murphy, the company said.
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The chairman of Carillion said he took “full and complete” responsibility for the construction firm’s collapse, which has put thousands of jobs on the line and left creditors, suppliers and pensioners facing losses of millions of pounds. Employing nearly 18,000 people in Britain, Carillion failed on Jan. 15 when its banks halted funding, triggering Britain’s biggest corporate demise in a decade and forcing the government to step in to guarantee vital public services, Reuters reported.
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In a related story, Bloomberg News reported that, for a leader of the U.K.’s party of business, Prime Minister Theresa May has had plenty of corporate headaches in her 18 months in power. None have been more spectacular than Carillion Plc, the construction giant whose collapse last month threatens to make politically toxic the notion of governments outsourcing to cut costs, Bloomberg News reported. At a parliamentary hearing, lawmakers Tuesday accused its management of being “asleep at the wheel.” Here is a snapshot of how U.K. Plc is going to keep giving May grief.
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The U.K. economy is being bailed out by stronger growth in the euro area and the rest of the world, according to the National Institute of Economic and Social Research, Bloomberg News reported. A better-than-expected global expansion accounted for about a third of the increase in U.K. gross domestic product last year, explaining the nation’s stronger-than-forecast performance in the wake of the Brexit vote, the think tank said in a report Wednesday. The resulting boost to trade, at a time when future commerce relationships remain uncertain, was “critical” for the U.K.
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Royal Bank of Scotland on Tuesday denied a British lawmaker's allegation that its executives misled a parliamentary committee over the extent to which the bank mistreated small businesses during and after the financial crisis, the International New York Times reported on a Reuters story. The chief executive and chairman of state-owned RBS were questioned extensively last week by Britain's Treasury Select Committee (TSC) over a restructuring unit that is alleged to have pushed struggling firms into bankruptcy in order to be able to pick up their assets on the cheap.
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Most of Carillion’s Canadian business, including facilities management at airports, hospitals and defence sites, is to be taken over by the insurer Fairfax Financial Holdings for an undisclosed amount, the Financial Times reported. More than 4,500 of Carillion Canada’s 7,000 employees will transfer to Toronto-based Fairfax, which has agreed to take over its support services functions, both companies announced on Monday.
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The former owner of Monarch Airlines will look to buy parts of Carillion after the British construction and outsourcing company collapsed under large debts last month, the Financial Times reported. Greybull Capital will be among the bidders interested in buying parts of Carillion that might be ringfenced following its liquidation as an auction takes shape, people familiar with its plans said.
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