Insider trading at Carillion? Probe into allegations at collapsed construction giant
The City watchdog is probing allegations of insider dealing in shares of collapsed construction giant Carillion, it has emerged.
The Financial Conduct Authority (FCA), which is investigating events that led up to the Wolverhampton-based firm’s collapse, disclosed in a letter to Labour MP Frank Field that it is ‘looking into’ the matter.
Penned by FCA chief Andrew Bailey, it reads: “We are also considering whether earlier announcements made by Carillion were false or misleading.
“Our investigation currently covers potential breaches of the Market Abuse Regulation, Listing Rule and Principles.
“We are aware of allegations of insider trading in Carillion’s shares prior to its trading update on July 10, 2017 and are looking into them.”
The bombshell revelation comes days after The Pensions Regulator (TPR) confirmed it is considering issuing a ‘contribution notice’ – a legally enforceable demand for a financial contribution to the pension deficit – against former Carillion directors.
Currently, the Pension Protection Fund (PPF) will be forced to pick up an approximate £800 million bill left in the wake of Carillon’s collapse.
But the TPR is investigating whether the company, or its directors, attempted to avoid their obligations to Carillion’s pension schemes.
Mr Field, chair of Parliament’s Pensions Committee, has calculated that former directors Richard Adam, Richard Howson, Philip Green, Keith Cochrane, Alison Horner and Andrew Dougal pocketed nearly £17m over a decade at Carillion.
The firm’s liquidation in January left a £900m debt pile and hundreds of millions of pounds in unfinished public contracts.
Nearly 2,400 people have lost their jobs so far, including more than 300 at the firm’s city centre headquarters. Work on the Midland MET Hospital in Smethwick has been at a standstill since the collapse.
