IT services provider Redcentric has said it hopes to move on following the prosecution of a former top dog for misleading investors.
A case led by the financial regulator culminated in the company’s former chief financial officer, Timothy Coleman, being found guilty of four charges relating to the making of false and misleading statements to the market.
In a note posted on the London Stock Exchange on Monday morning, Redcentric noted the outcome of the FCA’s case and said it hoped to continue “the positive progress it has made into 2022 and beyond.”
Coleman’s conviction followed Redcentric’s former finance director, Estelle Croft, pleading guilty to charges of making false statements and false accounting, and making false statements to Redcentric’s auditors, PwC.
The AIM-listed company’s former chief executive officer, Fraser Fisher, was acquitted by the jury on all charges, the FCA announced last week.
Redcentric had issued false and misleading unaudited interim results in November 2015, and false and misleading audited final year results in June 2016.
False statements led to artificial inflation of Redcentric’s share price, with investors paying more to purchase shares than they were worth. The estimated loss to affected Redcentric shareholders was approximately £43m, according to the regulator’s estimations.
In its note to investors, Redcentric added that it had “made wholesale changes to its board of directors and management team since 2016.”
A new team had “worked to transform the company, including overhauling the company’s accounting structures, controls and governance processes and optimising its products, platforms and networks,” the firm said.
Redcentric had given its “full support and cooperation” to the regulator. It also reached a settlement with the FCA in 2020, with affected shareholders compensated around £9m in total through a restitution scheme.
The sentencing of former chief financial officer Coleman is to be heard on 3 March.