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UK Fines Ex-Carillion Directors for Misleading Market
7 Jan
Summary
- Two former Carillion executives fined for misleading investors.
- Carillion collapsed in January 2018 with £7bn in debts.
- Fines follow KPMG's £21m penalty for audit failures.
The UK's Financial Conduct Authority (FCA) has imposed significant fines on two former executives of the defunct government contractor Carillion. Richard Adam and Zafar Khan have been fined £232,800 and £138,900 respectively, after dropping their appeals against the FCA's findings. The regulator determined that both individuals were aware of severe issues within the business but failed to disclose this information to investors, the board, or the audit committee.
Carillion, once a major construction and facilities management company, entered liquidation in January 2018. Its demise left approximately £7bn in debts, leading to 3,000 job losses and widespread disruption across 450 projects, including vital public services and infrastructure. The company's collapse also caused significant financial overruns on major projects such as the Royal Liverpool and Midland Metropolitan hospitals.
These actions by the FCA follow previous regulatory measures, including a £21m fine levied against accounting group KPMG in 2023 for "exceptional" failures in its audits of Carillion between 2013 and 2017. The FCA stated that these penalties highlight the serious consequences of individuals in positions of responsibility not keeping the market accurately informed.
