FCA imposes penalty on Richard Howson who was chief executive of bust contractor for more than five years

Former Carillion chief executive Richard Howson has been fined more than £230,000 for his part in a series of misleading statements being issued by the collapsed contractor.

Carillion went into liquidation in January 2018 in what was of the biggest corporate collapses in UK plc history.

Today, the Financial Conduct Authority (FCA) said Howson had been fined £237,700 – which was reduced from an earlier figure of £397,800 that it had imposed in June 2022.

Howson pac

Richard Howson appearing before the Public Accounts Committee, a month after Carillion collapsed in January 2018. He had been chief executive of the contractor for more than five years before stepping down in July 2017

It said this had been made because it accepted Howson’s “relevant” income was £990,763 – not £1,326,187 as previously stated – and because of “Howson’s cooperation during the Authority’s investigation as well as other investigations and his statements in sworn evidence in other related proceedings that he would not contest certain allegations made against him”.

In a 102-page judgment, the FCA said the fine related to statements made on three dates prior to the announcement of an £845m provision Carillion made on 10 July 2017. Howson stepped down as chief executive after more than five years in the role on the same day.

The judgment said: “The market’s adverse reaction resulted from the unexpected nature and size of the provision, which effectively wiped out Carillion’s profits over the previous six years.

“Carillion’s previous announcements, specifically its trading update on 7 December 2016, its 2016 financial results published on 1 March 2017 and its AGM statement on 3 May 2017, had given no indication to the market that such a provision was likely to be required. Such previous announcements were misleading and were made recklessly.”

In a statement, the FCA said: “Howson was aware of serious financial troubles in Carillion’s UK construction business. He failed to reflect this in company announcements or alert its board and audit committee, leading to poor oversight.”

It added: “Primary responsibility for ensuring the financial information disseminated to the market was accurate and not misleading lay with the group finance director. However, Mr Howson played an important role as the Board member with the most expertise on construction and contracting matters.

“The FCA found that Mr Howson acted recklessly and was knowingly concerned in breaches by Carillion of the Market Abuse Regulation and the Listing Rules.”

In its statement, the FCA said the fine had been imposed after Howson withdrew his challenge to the FCA’s decision.

Steve Smart, executive director of enforcement and market oversight 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.”

Carillion’s former group finance directors during the period in question have also been fined by the FCA.

Richard Adam and Zafar Khan were fined £232,800 and £138,900 respectively last month after they also withdrew their challenges to the FCA decision.

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