Hedge Funds Are the Good Guys In Carillion Debacle
Maybe if directors and the U.K. government had paid more attention to short-sellers, the collapse could have been avoided.
Follow the hedge funds.
Photographer: Daniel Sorabji/AFP/Getty Images
A plague on all their houses (plus their second homes, and buy-to-let properties)! A report by U.K. lawmakers on the causes of Carillion Plc’s collapse finds fault with almost everyone involved in Britain’s system of corporate governance. Management, non-executive directors, auditors, advisers and regulators are subjected to varying degrees of opprobrium.
The report’s key recommendation — that the government should consider breaking up the big four audit firms to eradicate conflicts of interest and cosy complacency — will doubtless send shockwaves through that profession. In addition, the ease with which Carillion was able to hide its true debt position from most investors suggests a review of accounting rules is necessary.