Former Carillion chief fined by FCA for role in misleading investors

Watchdog reduces Richard Howson’s fine to £237,700 after he withdraws challenge to punishment

The former boss of the construction company Carillion has been fined by the UK’s financial watchdog for his role in misleading investors before its collapse eight years ago.

The Financial Conduct Authority (FCA) fined Richard Howson £237,700 after Carillion’s ex-chief executive withdrew his challenge to the regulator’s punishment.

The watchdog ruled that Howson was “aware of serious financial troubles” in the group’s construction business but “failed to reflect this in company announcements or alert its board and audit committee, leading to poor oversight”.

The FCA said the primary responsibility for communicating accurate financial information lay with the group finance director, but that Howson “acted recklessly” and “was knowingly concerned” in breaches of market abuse and listing rules.

It comes eight years after the demise of the government contractor, which was one of the biggest construction and facilities management companies in the UK.

Carillion entered liquidation with £7bn of debts in January 2018, resulting in 3,000 job losses and causing chaos across 450 projects and public-sector schemes, including schools, roads, prisons and the expansion of Liverpool Football Club’s stadium.

The disruption delayed the construction of two new hospitals – the 646-bed Royal Liverpool and 669-bed Midland Metropolitan in Sandwell – which were due to open in 2017 and 2018, respectively. The projects ultimately ran hundreds of millions of pounds over budget.

Steve Smart, a director 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.”

Howson challenged the fine, which was first announced at a provisional sum of £397,800 in 2022, but withdrew his appeal before the court hearing.

The fine against Howson follows penalties against two other former executives, Richard Adam and Zafar Khan, last month. The FCA fined them £232,800 and £138,900 respectively, after both men also dropped their appeals against the watchdog’s findings.

Only months before its collapse, Carillion shocked investors by announcing a £845m writedown owing to problems in its construction projects. The company’s former chair, Philip Green, was working towards an “upbeat announcement” to investors five days before it announced the charge, board minutes showed, and the FCA found the company’s previous trading update had given no indication that such a step was necessary.

In 2023, the accounting group KPMG was fined £21m by the accountancy regulator for “exceptional” failures in its audits of Carillion between 2013 and 2017.

Howson declined to comment on the fine.