A tribunal court has finally set a date to hear appeals by three former Carillion directors over their fines, totalling almost £1m – three years after they were first lodged.
The Financial Conduct Authority (FCA) issued penalties worth a combined £870,000 in June 2022 after concluding that the directors had “acted recklessly” by issuing “misleadingly positive” financial updates about the doomed contractor, which went under in January 2018.
Former chief executive Richard Howson was fined £397,800, while former finance directors Richard Adam and Zafar Khan were told to pay £318,000 and £154,000 respectively. They were each later banned from being company directors for between eight and 12.5 years.
However, the trio lodged appeals against the fines on 22 July 2022.
Three years later, Construction News can reveal that the Upper Tribunal (Tax and Chancery Chamber) has finally published hearing dates for the appeals to take place in February 2026.
The former directors will only be forced to pay up if a tribunal judge rules that the fines should be upheld or amended, meaning they have yet to pay a penny of the combined £870,000.
When announcing the fines in 2022, the FCA said it would have also fined Carillion £37.9m for publishing misleading accounts, had it not already collapsed into liquidation with £7bn of liabilities and just £29m in cash.
In a statement released after the three directors lodged their case to the Upper Tribunal, the financial regulator said financial statements published by Carillion on 7 December 2016, 1 March 2017 and 3 May 2017 were “misleading and did not accurately or fully disclose the true financial performance of Carillion”.
“Those announcements made misleadingly positive statements about Carillion’s financial performance generally, and in relation to its UK construction business in particular,” the FCA said.
“The announcements did not reflect significant deteriorations in the expected financial performance of Carillion’s UK construction business and the increasing financial risks associated with it.”
The FCA said that the three directors had “acted recklessly and were knowingly concerned in Carillion’s contraventions”.
It added that the directors were “each aware” of Carillion’s real financial position but “despite their awareness of these deteriorations and increasing risks, they also failed to make the board and the audit committee aware of them”.
Financial services giant KPMG received fines of £14.4m and £21m by the Financial Reporting Council for failures relating to its audit of Carillion. It also settled a £1.3bn lawsuit with the Insolvency Service, which, as Carillion’s liquidator, also alleged that the consultancy had been negligent in its audit.
According to Howson’s LinkedIn profile, the former CEO is now based in Tampa, Florida, where he has been the president of a small energy tech company since January 2024. Khan is a self-employed consultant, according to his LinkedIn profile. Meanwhile, it is unclear whether Adam is in work or not.
The FCA has not responded to a request for comment. The judiciary declined to comment.
Howson, Adam and Khan have been approached for comment.
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Will Ing