Slaughter and May's Carillion advice and fees under scrutiny in government inquiry into collapse
Firm asked to provide details of fees and whether fees were "contingent on certain outcomes"
February 15, 2018 at 11:33 AM
3 minute read
The original version of this story was published on Law.com
Slaughter and May's advice to Carillion has been called into question, in the inquiry looking into the circumstances surrounding the construction company's collapse.
The parliamentary inquiry into the collapse has written to the magic circle firm to request information relating to the "nature of the advice" it provided to Carillion and the "period over which Slaughter and May provided that advice".
The request comes in response to comments made by former Carillion chairman Philip Green, who told the inquiry that as a result of his experience as managing director of wallpaper company Coloroll, which collapsed in 1990, he had always sought "quality advice", adding: "We took advice every step of the way."
Green said: "We sought very strongly at Carillion to make sure that we had quality advice, whether it was Slaughter and May as our lawyers, Lazard as our bankers or Morgan Stanley as our brokers. We believed we had high-quality advice in the Carillion situation… Those advisers were involved with us, intimately, throughout the last 12 or 18 months."
Slaughters has been asked whether it agrees with Green's assessment of its involvement and whether the firm agrees that its advice was acted upon.
The firm has also been asked for details of fees charged, whether the fees were "contingent on certain outcomes", and whether the advice provided by the firm was acted upon by Carillion.
The joint inquiry was set up by the Work and Pensions and Business, Energy and Industrial Strategy committees, following the collapse of the company in January. It is chaired by Frank Field MP and Rachel Reeves MP, both of whom are signatories on the letter, and is investigating "how a company that was signed off by KPMG as a going concern in Spring 2017 could crash into liquidation with a reported £5bn of liabilities and just £29m left in cash less than a year later".
The firm has until 20 February to respond to the request for information.
Slaughters has a longstanding relationship with Carillion and is among a raft of firms advising on the fallout from the collapse.
A Slaughters spokesperson said: "We confirm we have received a letter from the Chairs of the Work and Pensions Committee and the Business, Energy and Industrial Strategy Committee, asking us to answer some questions regarding our work for Carillion, to which we will of course respond."
Yesterday, it was announced that Clifford Chance had purchased Carillion Advice Services – the construction company's Newcastle-based legal services arm.
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