Findings by the Financial Conduct Authority (FCA) that collapsed construction giant Carillion “misled” the markets and acted “recklessly” should result in the guilty being sent to prison, construction union Unite has said.
Despite its scathing accusations, the FCA has issued a warning notice proposing only a public censure, rather than imposing any financial penalty for the corporate failings of the company, which affected thousands of workers and suppliers when Carillion collapsed into administration in January 2018.
The FCA’s hard-hitting warning notice considers that during the period from 1 July 2016 to 10 July 2017 Carillion:
The FCA also considers that the relevant executive directors during the time period 1 July 2016 to 10 July 2017 were “knowingly concerned in the above breaches by Carillion” and particularly highlights that:
The saga remains as one of the largest corporate failures in UK history, being described as a wake-up call for the industry and government - and nearly three years later the FCA has not yet completed its investigation into Carillion’s collapse.
Unite assistant general secretary Gail Cartmail said: “It is astonishing that nearly three years after Carillion’s collapse no one has yet been charged let alone convicted over their actions. Without a doubt Carillion had been trading while insolvent for some time before its collapse.
“This was not a victimless white-collar crime, thousands of workers lost their jobs. If executives and directors had reported honestly on Carillion’s financial predicament, many of those job losses could have been avoided. This case demonstrates everything that is wrong with corporate law in the UK, a failure to act before a company collapses, very slow investigations following a collapse and then if action is taken it is only a slap on the wrist.
“Public censure is not a sufficient punishment, the guilty should be going to prison. The government needs to get its head out of the sand and introduce legislation which will end this form of bandit capitalism once and for all.”
In a statement, an FCA spokesperson said: “We have a range of possible sanctions in enforcement cases, including censures and financial penalties, but we can only confirm the position of Carillion plc in this case, as per the Warning Notice Statement that we issued. It’s not a final decision, but to be clear, the proposed censure set out in the WNS is only in respect of Carillion plc. We cannot comment on the proposed sanctions against the individuals.”
Click here to download the FCA’s Warning Notice Statement on Carillion.