The UK's financial watchdog has blasted "reckless" Carillion and some of its former directors amid concerns they misled investors over the financial performance of the now scandal-embroiled company.
In an update today (November 13) the Financial Conduct Authority revealed it has issued a warning notice in relation to what was once one of the UK government's biggest contractors before it collapsed in 2018.
The warning notice was issued to Carillion and "certain of its former executive directors" over market manipulation claims the FCA alleges took place between 2016 and 2017.
The FCA claimed numerous market announcements made by the company throughout this period were "misleading and did not accurately or fully disclose" the true financial performance of Carillion.
The watchdog said: "They made misleadingly positive statements about Carillion's financial performance generally and in relation to its UK construction business in particular, which did not reflect significant deteriorations in the expected financial performance of that business and the increasing financial associated with it."
According to the FCA, certain former "reckless" executive directors were aware of the company's rapidly worsening finances but had failed to ensure Carillion's announcements were "reasonably accurate and reflected these matters."
The regulator added: "Despite their awareness of these deteriorations and increasing risks, they also failed to make the board and the audit committee aware of them, resulting in a lack of proper oversight.
In the notice, which was issued in September and is not a final decision by the FCA and can still be fought by the recipients, the regulator said it was pursuing a public censure for the company itself, and not a financial penalty.
The FCA said it could not comment further while the case was ongoing.
Carillion's 13 final salary pension schemes, which ultimately went into the Pension Protection Fund, had more than 28,500 members and a deficit of £587m at the end of July 2017.
In the aftermath of the company's collapse, documents released by Parliament revealed a Carillion director thought funding the company's defined benefit pension schemes was a "waste of money".
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