Ex-Carillion boss fined for 'reckless' actions

The former boss of collapsed construction giant Carillion has been fined by the UK's finance watchdog for acting "recklessly" and misleading others over the firm's precarious financial position.

Richard Howson, chief executive between 2012 and July 2017, was fined £237,000 by the Financial Conduct Authority (FCA), after he withdrew his challenge to its findings.

Howson was aware of the serious financial troubles in the firm's UK construction business but "did not respond appropriately to the warning signs", the FCA said.

The outsourcing business, based in Wolverhampton, which employed about 43,000 people including 19,000 in the UK, collapsed in January 2018 with debts of about £1.5bn.

It was one of the UK's biggest construction and facilities management companies, with several major government contracts.

But its failure and subsequent liquidation caused delays in the construction of the Midland Metropolitan Hospital in Smethwick and the £335m Royal Liverpool Hospital.

Its Wolverhampton headquarters went up for sale for £3m in April 2018 as further job losses were confirmed.

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.

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 FCA added.

"Carillion's failure was significant" Steve Smart, from the FCA, said.

"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.

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