Former boss of Wolverhampton construction firm Carillion hit with £237k fine over ‘reckless’ actions
The UK’s finance watchdog has fined the former boss of collapsed construction business Carillion for acting “recklessly” and misleading others over the firm’s precarious financial position.
The Financial Conduct Authority (FCA) has fined Richard Howson £237,000, after he withdrew his challenge to the watchdog's findings.
As group chief executive, a role he held from 2012 to July 2017, Mr Howson “did not respond appropriately to the warning signs” despite being aware of the serious financial troubles in Carillion’s UK construction business - the FCA said.
The Wolverhampton-headquartered 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.
Mr Howson held responsibilities including working closely with the finance director to ensure the firm communicated effectively with investors in his role as chief executive.
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.
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” - the watchdog said.
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, former finance directors Richard Adam and Zafar Khan were fined by the FCA over their involvement in misleading statements being issued by the firm which had its headquarters in Salop Street. Their fines totalled £232,800 and £138,900 respectively.
