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Carillion: Allegations of insider trading revealed

The Financial Conduct Authority (FCA) is considering “allegations of insider trading” at Carillion as part of its investigation into the collapsed firm.

The FCA’s probe into the contractor, first announced shortly before Carillion’s liquidation, has been extended to encompass the allegations, as revealed in a letter from the watchdog released by the work and pensions select committee.

“Our investigation currently covers potential breaches of the Market Abuse Regulation, Listing Rules and Listing Principles,” the letter reads.

“We are aware of allegations of insider trading in Carillion’s shares prior to its trading update on 10 July 2017 and are looking into them.”

Committee chair Frank Field had originally written to the FCA regarding Carillion’s government request for immunity from regulatory investigations, as detailed in a National Audit Office report.

In his letter that was also released by the committee, Mr Field asked whether this type of request was normal and how it would typically be handled.

In reply, FCA chief executive Andrew Bailey said the request was never passed to it by the government.

On what its response would be to such a request, Mr Bailey said: “Under [our] policy, it would only be in an exceptional case that we would be prepared to agree to issue a public censure rather than impose a financial penalty if a financial penalty would otherwise be the appropriate action.”

Mr Field said he had also written to former Carillion chairman Philip Green about the request.

The MP claimed Mr Green had responded by suggesting that the lenders with whom Carillion had been seeking a last-ditch financing deal had insisted on the immunity request as a condition of any further lending.

The Financial Reporting Council, which is also conducting an investigation into the contractor, said last month its lawyers and accountants were making “good progress”, but would not “cut corners” to speed up the probe.

The Insolvency Service also has an open investigation into the conduct of the company’s bosses.

The probe was fast-tracked by business secretary Greg Clarke in the aftermath of the firm’s liquidation.

 

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