FCA Takes Action Against Former Carillion Finance Directors

The Financial Conduct Authority (FCA) has fined two former finance directors of Carillion plc for their role in issuing misleading market statements during a period of serious financial difficulty.

Richard Adam and Zafar Khan were both aware of significant financial problems within Carillion’s UK construction business but failed to ensure this information was accurately reflected in public announcements. They also did not adequately inform the Board or the audit committee, resulting in weak oversight and a lack of transparency.

As a result of their actions, Mr Adam was fined £232,800 and Mr Khan £138,900. The penalties were imposed after both individuals withdrew their challenges to the FCA’s findings.

Failures in Financial Reporting and Controls

In their roles as finance directors, Mr Adam and Mr Khan were responsible for Carillion’s financial reporting systems, controls and procedures. The FCA found these arrangements were inadequate, failing to ensure that contract accounting judgments within the UK construction business were properly made, recorded and reported.

The regulator concluded that both individuals acted recklessly and were knowingly involved in Carillion’s breaches of the Market Abuse Regulation and the Listing Rules — rules designed to protect market integrity and investor confidence.

A Clear Message on Accountability

“Those in positions of responsibility have a duty to keep the market accurately and adequately informed. The Carillion case shows the serious consequences when this duty is not met. Our action demonstrates our commitment to preventing market abuse and upholding the standards we expect.”

— Steve Smart, Joint Executive Director of Enforcement and Market Oversight, FCA

This enforcement action reinforces the FCA’s focus on accountability at senior levels and sends a clear signal to the market: transparency, robust financial controls and honest disclosure are essential to maintaining trust and protecting investors.