The would-be fine came after the FCA determined that Carillion “recklessly published announcements” on 7 December 2016, 1 March 2017 and 3 May 2017. The FCA said these were misleading and did not accurately or fully disclose Carillion’s true financial performance.
It said the announcements made misleadingly positive statements about Carillion’s financial performance generally and in relation to its UK construction business in particular. They did not reflect the “significant deteriorations” in the expected financial performance of Carillion’s UK construction business. Nor did they reflect the increasing financial risks associated with it.
This is not a paywall. Registration allows us to enhance your experience across Construction Management and ensure we deliver you quality editorial content.
Registering also means you can manage your own CPDs, comments, newsletter sign-ups and privacy settings.
Executives handed provisional fines
Meanwhile, the FCA has fined three former Carillion executives a total of £870,000.
Former chief executive Richard Howson has received a provisional fine of £397,800 The FCA also provisionally fined former finance director Richard Adam £318,000 and former finance director Zafar Khan £154,400. The FCA said that Howson, Adam and Khan had acted recklessly and were “knowingly concerned in Carillion’s contraventions”.
All three have referred their respective decision notices to the Upper Tribunal where they will each present their case. The Upper Tribunal will decide whether or not to uphold the FCA’s decisions against the three former executives.
Financial position ‘remained hidden’
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Carillion failed to take reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with its obligations under the Listing Rules.
“As a result its true financial position remained hidden over many months and the effects of its collapse were aggravated, causing substantial harm to shareholders and creditors. This is market abuse, and as damaging to market integrity as insider dealing and manipulation, though not often described in this way. It should be.
“The FCA’s decisions on the three senior individuals whom the FCA alleges were involved in these failures will now be reviewed in the Upper Tribunal.”
