The Financial Conduct Authority (FCA) has today announced that it intends to take further action against failed outsourcer Carillion for “misleading” shareholders with false information.
In a warning notice published today the watchdog said that a number of senior executives were “knowingly concerned” in numerous breaches of market rules, and had acted “recklessly”.
These include “disseminating information that gave false or misleading signals as to the value of its shares” and “failing to act with integrity” towards its shareholders.
Carillion collapsed into administration in 2018 with liabilities of almost £7bn after a series of financial troubles caught up with the outsourcing giant.
An inquiry into the collapse carried out by MPs described the collapse as “a story of recklessness, hubris and greed”, and said that the firm’s business model was “a relentless dash for cash”.
At the time, lawmakers accused the firm’s directors of misrepresenting the financial realities of the business.
In today’s release, the FCA said that it had found that Carillion’s announcements on 7 December 2016, 1 March 2017 and 3 May 2017 did not “accurately or fully disclose the true financial performance” of the firm.
It also found that the company’s systems and procedures “were not sufficiently robust” to ensure that accounting judgements made in relation to its UK construction business were appropriately made and reported to the audit committee.
Finally, it said that the “relevant executive directors were each aware of the deteriorating expected financial performance” but “failed” to make sure that announcements “accurately and fully reflected” these matters.
The warning notice does not constitute a final decision, but if it does decide to take action against the company, the FCA is proposing public censure rather than a financial penalty.
For the individuals in question, the FCA has recourse to a number of additional penalties.
Carillion and the individuals in question will have 14 days to make representations to the Regulatory Decision Committee (RDC).