Conflicts of interest question raised over PwC Carillion work

PwC has been questioned by British ministers on how it is managing conflicts of interest after being awarded a £50m ($67m) contract to act as special managers for Carillion’s liquidation.

This question was raised in a letter by the Work and Pensions Select committee, which has been tasked with investigating the collapse of Carillion. The committee also requested a justification for the Big Four firm receiving a 20% premium on services provided post liquidation.

The UK’s National Audit Office (NAO) published its ‘Investigation into the government’s handling of the collapse of Carillion’ report on 7 June which detailed the company’s liquidation process.

In response to the NAO’s report, the Work and Pensions Committee chair Frank Field said: “As Special Managers, with a contract to print money awarded without any competition, PwC will draw £50 million for six months’ work.

“More money for PwC is less money for sub-contractors and the PPF. We have further questions about those payments—and how PwC’s conflicts of interest arising from their long history of work on Carillion are being managed—and have written to PwC and the Official Receiver requesting further information. I am particularly concerned that PwC’s conflicts could jeopardise action against individual directors.”

Business, Energy and Industrial Strategy Committee chair Rachel Reeves added: “The dice are loaded in the Big Four’s favour. They make a killing in fees advising struggling companies how to turn them round and then they pocket millions tidying up when that advice fails on Carillion, taxpayers are left to foot the multimillion pound bill for corporate failure.”

A spokesperson for PwC commented: “We understand concerns over the cost of the liquidation, however, without this work the cost to UK jobs, the economy and the taxpayer would be considerably higher.

“From the outset it has been clear that PwC’s fees for assisting the Official Receiver on the liquidation of Carillion will be subject to scrutiny and approval by the Official Receiver and the Court."