A luxury neigbourhood currently hosting World Cup fans in Qatar is at the heart of a multi-million pound lawsuit involving bust outsourcer Carillion.
The Msheireb development, in Doha, is one of the loss-making projects named in court documents by the Official Receiver (OR), which is managing the liquidation of Carillion.
The OR, part of the Government’s insolvency service, is suing Carillion’s auditor KPMG for allegedly ‘obscuring’ losses on projects with negligent accounting.
Complications: The Msheireb development, in Doha, is one of the loss-making projects named in court documents following the 2018b collapse of outsourcer Carillion
When Carillion collapsed under a £7billion debt pile in 2018, it was one of the UK’s largest-ever corporate failures. More than 3,000 staff lost their job, and 75,000 in its supply chains were affected.
Now the OR is trying to recover what it can for creditors. One route is a legal case against KPMG, which it says was negligent in audits between 2014-16.
It outlines instances where Carillion’s financial statements were allegedly ‘materially mis-stated’, because it accounted for money coming from long-term construction contracts incorrectly, making it look like it was in better health than it was.
One was Msheireb, the second-highest value contract after the Battersea Power Station project. Msheireb was beset with difficulties.
Court documents state: ‘This should have caused KPMG to look at future forecasts in relation to this contract with heightened scepticism.’
KPMG denies negligence, and said liquidators failed to prove that accounts were misstated. It said the losses claimed were caused by operational problems at Carillion.
A spokesman for the liquidated Carillion said KPMG ‘failed to respond to material aspects of Carillion’s case’.
He said Carillion claims that the value of the Battersea and Msheireb contracts in the year ending 2016 was mis-stated by £351.9million, adding: ‘Had KPMG acted as a reasonably competent auditor, it would have detected these.’
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