The Financial Reporting Council (FRC) was questioned on its response to Carillion’s collapse at the regulator’s annual priorities meeting, with a panel member from Aberdeen Standard Investments admitting that there were a number of red flags at the outsourcing giant which worried investors
The FRC was probed on whether the liquidation of Carillion will change or initiate reviews from the regulator in the future, while also being asked where the stakeholders were throughout the collapse and why they did not ask questions sooner.
The FRC said its investigation into KPMG as the auditors of Carillion was its ‘upmost priority’ and had taken precedence over other cases.
When the evidence from the investigation has been collected the FRC said it would take a step back to assess how behaviours can be changed going forward, commenting that it was too early to reach a conclusion on what these lessons may or may not be.
Panel member Deborah Gilshan, governance and stewardship director at Aberdeen Standard investments, has submitted evidence to the Department for Business, Energy and Industrial Strategy (BEIS) for their investigation into Carillion’s collapse.
Gilshan admitted that there were a number of red flags at Carillion that worried investment managers, so much so that by July 2017 Aberdeen Standard Investments pulled all investment from the company. After Carillion issued its profit warning the investment company divested its capital and reinvested it elsewhere to act in the best interest of its clients.
Report by Amy Austin
