The Financial Conduct Authority has fined two former finance directors hundreds of thousands of pounds for their part in misleading statements being issued by Carillion plc - the infrastructure giant which went into compulsory liquidation in 2018.
Richard Adam and Zafar Khan were 'both aware of serious financial troubles in Carillion's UK construction business but failed to reflect this in company announcements or alert the Board and audit committee, leading to poor oversight', the FCA said.
Mr Adam was finance director of Carillion from April 2007 to 31 December 2016 and was fined £232,800. Mr Khan was finance director of Carillion from 1 January 2017 to September 2017 and was fined £138,900,
The fines were imposed after both men withdrew their challenges to the FCA's decision.
As finance directors, the pair had responsibility for Carillion's procedures, systems and controls relating to financial reporting. These were not sufficient to ensure that contract accounting judgments made in its UK construction business were made, recorded and reported appropriately.
The FCA found both acted recklessly and were knowingly concerned in breaches by Carillion of the Market Abuse Regulation and the Listing Rules.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: 'Those in positions of responsibility have a duty to keep the market accurately and adequately informed. With Carillion, we have seen the serious impact it can have when they don't. The action taken against Mr Adam and Mr Khan demonstrates our commitment to preventing market abuse and upholding the standards we expect.'
