The former boss of collapsed firm Carillion has been fined by the UK’s finance watchdog for acting “recklessly” and misleading others over the firm’s precarious financial position.
The Financial Conduct Authority (FCA) said it had fined Richard Howson £237,000, after he withdrew his challenge to the FCA’s findings.
As group chief executive, a role he held between 2012 and July 2017, Mr Howson had been aware of the serious financial troubles in Carillion’s UK construction business, but “did not respond appropriately to the warning signs”, the FCA said.
The outsourcing business, which employed about 43,000 people including 19,000 in the UK, collapsed in January 2018 with massive debts.
Before its failure, Carillion had been one of the UK’s biggest construction and facilities management companies, with several major government contracts.
In his role, Mr Howson held responsibilities including working closely with the finance director to ensure the firm communicated effectively with investors.
But the FCA said signs of financial risks within Carillion’s construction arm were not reported to the board or the audit committee, who were instead given details that painted a more optimistic picture of its financial performance between 2016 and 2017.
The watchdog said that Mr Howson did not properly address the risks and was knowingly involved in the firm’s sharing of potentially false or misleading information, therefore acting “recklessly”.
Steve Smart, executive director of enforcement and market oversight at the FCA, said: “Carillion’s failure was significant.
“Jobs were lost, public sector projects put at risk and investors, who trusted the company to give them accurate information, suffered large scale losses.
“That’s why the FCA worked diligently to hold the company and its senior leaders to account.”
Last month, two former finance directors, Richard Adam and Zafar Khan, were fined by the FCA over their involvement in misleading statements being issued by the firm.
Their fines totalled £232,800 and £138,900 respectively.
