Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
  1. Homepage
  2. Equities
  3. United Kingdom
  4. London Stock Exchange
  5. Carillion plc
  6. News
  7. Summary
    CLLN   GB0007365546


SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector news

Carillion : KPMG was 'untruthful' in defence against Silentnight fine, UK tribunal says

10/13/2021 | 04:07am EDT
FILE PHOTO: The KPMG logo is seen at their offices at Canary Wharf financial district in London

* KPMG accused of 'burning platform' strategy

* KPMG says accepts findings from tribunal

* FRC says untruths undermine regulatory system

* KPMG still faces outcome of Carillion investigation

LONDON, Oct 13 (Reuters) - KPMG mounted an "untruthful" defence when it sought to reduce a fine imposed for its conflict of interest during the sale of British bed manufacturer Silentnight in 2011, Britain's accounting watchdog said on Wednesday.

KPMG, one of the world's so-called Big Four accounting firms, was found to have had a conflict of interest when it acted as adviser to both Silentnight and to U.S. private equity company HIG Capital which had sought to buy the British firm.

In August, Financial Reporting Council (FRC) said it fined KPMG 13 million pounds ($17.7 million), the highest on an accounting firm in a non-audit case, while partner David Costley-Wood was fined 500,000 pounds.

At an independent tribunal in June, KPMG had called for a fine of no more than 5 million pounds.

On Wednesday, the FRC published the tribunal's report on how it determined the level of the fine and the case in general.

"For the first time, the tribunal has held that a respondent advanced an untruthful defence," the FRC said in a statement.

The FRC had argued that Costley-Wood, who no longer works at KPMG, assisted with a 'burning platform' strategy to drive Silentnight into an insolvency process to help HIG acquire the company without the burden of pension liabilities.

"We do consider that the defence put forward by Mr Costley-Wood in relation to the burning platform was a construct invented by him to assist in his defence," the tribunal said.

Costley-Wood had no comment, his law firm Linklaters said.

The FRC said respondents were entitled to defend themselves but said advancing a defence which a respondent knew to be untruthful risked undermining the regulatory system and compounded the original failings.

KPMG said the report made "difficult reading" and said it accepted the findings and regretted that professional standards expected of its partners were not met in this case.

"We no longer provide insolvency services and we have improved our broader controls and processes significantly since this work was performed in 2010," KPMG UK CEO Jon Holt said in a statement.

KPMG will reflect on the tribunal's findings carefully to learn lessons, Holt said.

KPMG is also being investigated by the FRC for its role in auditing collapsed builder Carillion, and any fine from this case would also likely to be hefty.

($1 = 0.7344 pounds) (Reporting by Huw Jones; Editing by Jason Neely and Edmund Blair)

© Reuters 2021
All news about CARILLION PLC
10/13CARILLION : KPMG was 'untruthful' in defence against Silentnight fine, UK tribunal says
09/02CARILLION : KPMG To Face Disciplinary Tribunal Over Misleading UK's Financial Regulator In..
05/19Litigation Capital Management Limited Enters into New Litigation Finance Agreement with..
04/21KIER : British contractor Kier plans to raise up to $334 mln
01/14CARILLION : directors' disqualification proceedings
2020CARILLION : UK watchdog finds apparent breaches by KPMG's Carillion audit
2020CARILLION : Investigation into the rescue of Carillion's PFI hospital contracts
2020CARILLION : Outcome of UK probe into Carillion audit delayed until summer
2019CARILLION : KPMG fined over defective audit of Co-op Bank, faces extra checks on audits
2019CARILLION : UK lawmakers want Big Four accounting firms broken up
More news
Analyst Recommendations on CARILLION PLC
More recommendations
Duration : Period :
Carillion plc Technical Analysis Chart | MarketScreener
Full-screen chart
Managers and Directors
Andrew Peter Davies Chief Executive Officer
Andy Jones Chief Operating Officer
Kellie McAvoy Head-Investor Relations
John Denning Director-Group Corporate Affairs
Lee Watson Chief Transformation Officer
Sector and Competitors