KPMG reaches settlement with liquidator of CarillionPosted On: Feb. 17, 2023 11:55 AM CST
(Reuters) — KPMG said on Friday it has reached a confidential settlement agreement with the liquidator of Carillion, the builder it audited before it collapsed.
Carillion collapsed in 2018 under 7 billion pounds ($8.40 billion) of debt, with thousands of jobs lost, leading to government-backed reviews which recommended a shake-up in auditing standards.
Liquidators of Carillion last year sued KPMG for 1.3 billion pounds for missing “red flags” during its audits of the construction giant.
Britain’s Official Receiver, part of the Insolvency Service, which is liquidating the former blue-chip group, alleged that negligent failures by KPMG to detect misstatements in the accounts of Carillion cost claimants’ extensive loss and damage.
KPMG said at the time it believed the lawsuit was without merit.
“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," KPMG’s UK chief executive Jon Holt said in a statement.
Britain’s auditing watchdog, the Financial Reporting Council has yet to announce the outcome of its investigation in KPMG’s audits of Carillion.
Holt said the FRC’s ongoing investigation is an important part of learning lessons from Carillion’s collapse and “we will continue to cooperate fully with it.”