Former KPMG partner blames junior colleagues over Carillion demise
A former KPMG partner in charge of auditing Wolverhampton-based Carillion’s accounts before its collapse has blamed his more junior colleagues for misleading regulators.
A tribunal hearing, expected to last five weeks, has opened in London and is dealing with allegations against the firm and six individual auditors.
KPMG, one of the “Big Four” accountants, has admitted misconduct and apologised.
The tribunal run by the Financial Reporting Council must now decide if any of the six individuals are guilty of misconduct. Five have denied all misconduct.
Outsourcing and construction business Carillion collapsed four years ago this month with 3,000 job losses and £7 billion of liabilities.
The FRC alleges KPMG misled its inspectors by forging documents in relation to the audit of Carillion and a software company, Regenersis.
The 2016 Carillion audit was led by Peter Meehan, a partner at KPMG from 1998 until he was suspended in 2019 following an internal investigation.
His counsel, Ian Croxford QC, argued that there was no evidence that he was involved in a conspiracy to mislead the regulators, and that it was former colleagues who were responsible.
He said Mr Meehan had placed his trust and confidence in those who were members of his audit team and felt let down.
Alistair Wright, a KPMG group senior manager working under Mr Meehan, has already admitted “serious misconduct”.
Stuart Smith, who was the partner in charge of the Regenersis audit, has reached a confidential settlement with the FRC.
The initial tribunal sessions took place online due to the ongoing Covid-19 outbreak.
The FRC says the hearing proper will be held in person at the International Dispute Resolution Centre.
Mr Meehan, Mr Wright, Mr Smith, Richard Kitchen, Adam Bennett and Pratik Paw have each denied allegations of wrongdoing.
All six of the auditors have now left the firm.
