Slaughters warned Carillion board about accounting disclosures last May, leaked minutes reveal
Magic circle firm advised that decision not to disclose accounting issues could attract 'very close scrutiny'
February 27, 2018 at 07:53 AM
3 minute read
Slaughter and May warned Carillion's directors about the implications of failing to disclose accounting issues as far back as last May, newly released board minutes have revealed.
In a meeting which took place on 9 May 2017, Slaughters corporate finance partner William Underhill – a longstanding adviser to Carillion – told the company's board that a decision not to disclose negative accruals across projects including the construction of Royal Liverpool Hospital and the redevelopment of Battersea Power Station would come under "very close scrutiny".
According to the board minutes, Underhill told directors that "if, going forward, a decision was taken that the accounts had to be restated, the decision not to announce would come under very close scrutiny", and that "protecting the share price was not a reason in itself".
The minutes, which were leaked to the parliamentary inquiry into the collapse by whistleblower and former Carillion finance director Emma Mercer, suggest that the construction company's directors were well aware of accounting issues that subsequently contributed to its collapse this January.
Company secretary and director of legal services Richard Tapp was also an attendee at the meeting, which was held via telephone and also included representatives from Carillion's banking advisers at Morgan Stanley.
Slaughters has been approached for evidence by the cross-party inquiry looking into the collapse of the construction giant, with the magic circle firm being asked to provide information relating to the "nature of the advice" it provided to Carillion and the period during which it provided that advice.
Former Carillion chairman Philip Green previously told the inquiry that the board "sought very strongly at Carillion to make sure that we had quality advice", adding that their advisers, including Slaughters, were "intimately" involved throughout the 12-18 months leading up to the company's collapse.
Slaughters has been asked if it agrees with Green's assessment of its involvement and whether the firm agrees that its advice was acted upon. The firm was given until 20 February to respond to the request for information, and it is understood that it replied within that timeframe.
Slaughters has a longstanding relationship with Carillion and is among a raft of firms advising on the fallout from the collapse. Underhill, who has a focus on securities issues and M&A, has been at Slaughters since 1981, and has worked with Carillion for many years, advising on projects such as the £800m British-Chinese joint venture to develop the 'Airport City' business district around Manchester Airport.
Slaughters declined to comment.
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllSingapore's Drew & Napier Secures $3.5B Award in Civil Suit
Trending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250