Eight years after the collapse of the publicly listed construction company Carillion in January 2018, sanctions are still being imposed and individuals deemed complicit in the failure. 聽
Richard Adam, finance director of Carillion from April 2007 to 31 December 2016, and Zafar Khan, who took over for what was the final year, were both aware of financial troubles in Carillion鈥檚 UK construction business but failed to reflect this in company announcements or alert the board and audit committee, leading to poor oversight.
That is the conclusion of an investigation by City watchdog the Financial Conduct Authority (FCA).
The FCA found that both acted recklessly and were knowingly concerned in breaches by Carillion of the Market Abuse Regulation and the Listing Rules.
As finance directors, the pair had responsibility for Carillion鈥檚 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.
Richard Adam has been fined 拢232,800 and Zafar Khan 拢138,900.
In 2022, the FCA said that it was planning to fine the two men 拢318,000 and 拢154,400, respectively. However, the fines have now been reduced after the men withdrew their challenges to the FCA鈥檚 decision and co-operated with the investigation.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: 鈥淭hose 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鈥檛. The action taken against Mr Adam and Mr Khan demonstrates our commitment to preventing market abuse and upholding the standards we expect.鈥�
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