Britain pulls rules aimed at applying lessons from Carillion, BHS, collapses (updated)

Carillion

16/10/2023 15:56

(Writes through with more comment, details)
    By Huw Jones
       LONDON, Oct 16 (Reuters) - Britain on Monday
unexpectedly scrapped "burdensome" draft rules is has already
put to parliament for approval just 13 weeks ago to apply
lessons from the collapse of builder Carillion and retailer BHS.
    The business and trade ministry said it wanted to cut
reporting requirements on companies and keep London a globally
competitive place to list.
        The ministry proposed the rules in July to require
company boards to explain in an annual "resilience" statement
what are the main risks to their survival, and why they are
confident about the quality and reliability of their corporate
reporting beyond financial statements.
        Carillion and BHS collapsed with little warning, with
the former's auditor, KPMG, fined a record 21 million pounds 
($25.60 million) last week for failings in how it checked the
builder's books.
  
        The government said it has withdrawn the rules, due to
be approved in parliament, after consultation with companies
raised concerns about imposing additional reporting
requirements.
    "Instead, the Government will pursue options to reduce the
burden of red tape to ensure the UK is one of the best places in
the world to do business," the ministry said in a statement.
    The collapse of Carillion and BHS prompted three
government-backed reviews that recommended root-and-branch
reform of auditing and corporate governance, including the
improvements just scrapped by government.
        The government has also yet to put forward legislation
to create a more powerful audit policeman, a core recommendation
from one of the reviews.
    "The government remains committed to wider audit and
corporate governance reform, including establishing a new Audit,
Reporting and Governance Authority to replace the existing
Financial Reporting Council," it said on Monday.
        "We will bring forward legislation to deliver these
reforms when Parliamentary time allows."
    Business minister Kevin Hollinrake said the rules ditched on
Monday will be replaced with a "more targeted, simpler and
effective" framework.
        "If companies are to have the certainty they need, it is
vital that this reform and steps to enhance the competitiveness
of the UK, are backed by political consensus," said Julia
Hoggett, CEO of London Stock Exchange plc, said in the
ministry's statement. 
    
        
  


($1 = 0.8203 pounds)

 (Reporting by Huw Jones, editing by Deborah Kyvrikosaios)
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