Financial Reckoning: Carillion Directors Fined After Appeals Dropped

The Financial Conduct Authority fined former Carillion finance directors Richard Adam and Zafar Khan after their appeals were dropped. They misled investors about Carillion's financial health before its collapse in 2018. Carillion fell under £7 billion of liabilities, affecting public services and projects.

The Financial Conduct Authority (FCA) on Monday announced fines against two former Carillion finance directors following the abandonment of their appeals concerning the company's financial misrepresentations before its collapse in 2018. Richard Adam and Zafar Khan were found to have failed in disclosing critical issues within Carillion's UK construction division.

Once a major British contractor employing 43,000 people, Carillion collapsed in January 2018 shouldering liabilities worth £7 billion ($9.45 billion). This collapse significantly disrupted public services and halted major projects. Adam and Khan have been fined £232,800 and £138,900 respectively, reduced from prior penalty figures stated in the FCA's 2022 notices.

The FCA determined that both ex-directors acted recklessly, violating market abuse and listing regulations by disseminating misleading information and neglecting proper controls. Steve Smart, FCA's joint executive director of enforcement, emphasized the responsibility leaders hold to provide accurate market information. Khan, resigning from his directorship after just nine months, claimed a lack of resources to defend himself further. Meanwhile, former Carillion CEO Richard Howson continues to dispute related charges.

(With inputs from agencies.)