RBS played a role in the collapse of Carillion claims acting CEO Keith Cochrane

cochrane

Keith Cochrane Acting CEO of Carillion | Image Credit: Construction News

The acting chief executive of Carillion has accused lenders of undermining the company’s efforts to save money.

Keith Cochrane accused tax-payer backed Royal Bank of Scotland (RBS) of taking “unilateral action which, in the company’s view, undermined the group’s efforts to conserve cash”, in his statement filed at the High Court in London.

According to reports, Cochrane said that RBS informed Carillion, the UK’s second biggest construction services company, that it wanted the company to pre-fund supplier payments made through the bank. This meant that Carillion would have to make payments two days earlier than planned.

The interim CEO said this “negatively impacted Carillion’s liquidity by between £2m and £20m.”

Cochrane added that RBS had insisted changes would only be in place until the UK Government had provided support.

Update:

The company was discussed at Prime Ministers Question Time – with Theresa May stating she understands that it is a “difficult time” for many people.

However, she said that those who work for Carillion in the public sector should keep turning up to work, and they will be paid.

May added that the government is “looking very carefully” at the issue involving apprentices.

Jeremy Corbyn challenged May about the governments involvement with the company. The labour leader questioned the prime minister on £2bn of contracts that the government gave Carillion after it had issued a profits warning last year.

Corbyn stated that either the government gave Carillion contracts to keep it afloat or it was negligence.

May insisted that a profit warning only means that the company is going to make lower profits than expected, and that if the government pulled out every time a company issued a profit warning, then companies would definitely fail and jobs would be lost.

Corbyn also asked May if she could guarantee that no more money is handed to the chief executive and directors of Carillion, at a time when 8,000 workers on its private sector contracts face not being paid?

The prime minister replied that some of the staff who work on private sector contracts will keep getting paid.

She stated: “There are a number of facility management contractors who have come to an agreement with the Official Receiver which means their workers will continue to be paid.

“The official receiver is doing their job and working with these companies.”

Political editor of the Huffington Post, Paul Waugh, took to twitter to express his disagreement with the prime minister:

 

Paul Waugh took to twitter to criticise the prime ministers defence | Image credit: @paulwaugh on twitter

MPs also took to twitter to react to today’s PMQs discussion about Carillion. Labour MP for East Leeds, Richard Burgon, stated that he does not believe Theresa May answered Corbyn’s questions well enough.

MP Richard Burgon stated that the prime minister failed to answer the questions she was presented with | Image Credit: @RichardBurgon on twitter

However, Conservative MP Greg Hands stated that Corbyn was ill informed about profit warnings going into the debate:

Chelsea & Fulham MP stated that Corbyn was ill informed about profit warnings | Image Credit: @GregHands on Twitter

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