Carillion £250m legal claim advances

A £250m legal claim against Carillion’s auditor KPMG has moved a step closer.

The official receiver, which is managing the liquidation of the firm, has sent a letter before action to KPMG warning it of the potential claim, according to Sky News.

The latest action follows on from the receiver securing funding from an investment company, Litigation Capital Management, last month to cover the cost of a potential legal claim.

In May last year, the official receiver applied to obtain documents from KPMG to ascertain whether it had a claim against the firm for losses resulting from “negligent conduct of its statutory audit”. The official receiver claimed dividends, bonuses and advisory fees of around £250m would not have been paid between 2014 and 2017 if KPMG had spotted mis-statements in the company’s accounts.

The Financial Reporting Council is investigating KPMG’s auditing of Carillion between 2014 up to its collapse in early 2018. It was reported in March that the auditor was moving towards a settlement with the FRC, which could reach £25m.

KPMG declined to comment. The official receiver has been contacted for comment.