Three former Carillion executives have been accused of “market abuse” by the City regulator and could face combined fines worth nearly £1m for issuing misleading statements regarding the disgraced outsourcer’s financial health before it collapsed in 2018. The Financial Conduct Authority (FCA) said that it found the executives had “acted recklessly” and had been aware the company was publishing “misleadingly positive” statements about its finances in 2016 and 2017, particularly in relation to the UK construction arm. The watchdog said the former chief executive Richard Howson, and former finance directors Richard Adam and Zafar Khan “were each aware of the deteriorating expected financial performance within Carillion’s UK construction business and the increasing financial risks associated with it”. “Despite their awareness of these deteriorations and increasing risks, they also failed to make the board and the audit committee aware of them, resulting in a lack of proper oversight.” The FCA said it intended to issue fines against all three executives: £397,800 against Howson, £318,000 against Adam, and £154,000 against Khan as a result of the findings. However, the findings and fines are currently provisional, as all three are appealing against the decision at the regulator’s upper tribunal. The FCA’s executive director of enforcement and market oversight, Mark Steward, said: “Carillion failed to take reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with its obligations under the listing rules. “As a result its true financial position remained hidden over many months and the effects of its collapse were aggravated, causing substantial harm to shareholders and creditors. This is market abuse, and as damaging to market integrity as insider dealing and manipulation, though not often described in this way. It should be.” The demise of Carillion was the UK’s biggest corporate failure in decades. The outsourcer collapsed with £7bn of debts in January 2018, resulting in 3,000 job losses and causing chaos across hundreds of its projects and public sector works, including schools, roads, prisons and even Liverpool FC’s stadium, Anfield. It also delayed the construction of two new hospitals including the 646-bed Royal Liverpool and 669-bed Midland Metropolitan in Sandwell, West Midlands, which were due to open in 2017 and 2018, respectively, resulting in the projects running hundreds of millions of pounds over budget. The FCA said it was issuing Carillion with a pubic censure rather than a financial penalty, given the firm had collapsed and was already going through the process of being liquidated. The FCA said Carillion would have otherwise faced a fine worth nearly £38m. The subheading and text of this article were amended on 28 July 2022 to give the correct first name for Richard Howson.