Carillion, a UK construction and outsourcing group with about 450 government contracts, issued a profit warning in July 2017 and went into compulsory liquidation on 15 January 2018. A joint committee of MPs blamed its board and auditor, and the Insolvency Service, the Financial Conduct Authority and the Financial Reporting Council later took action against former executives and KPMG.
The FRC said in May 2026 that its Carillion investigations had concluded, and the FCA's cases against the three former executives ended with fines in January and February 2026. Three former executives were disqualified as directors in 2023 and the cases against five non-executives were dropped.
Carillion published a market announcement on 7 December 2016. The FCA later found that this announcement, and those of 1 March and 3 May 2017, were published recklessly and were misleading about the company's financial position.
Carillion reported its results for 2016. The Insolvency Service later said the 2016 accounts showed a 146.7 million pound profit where a 61.7 million pound loss should have been reported, an allegation set out in the disqualification undertaking Richard Howson later gave.
Carillion paid a 2016 final dividend of 54.4 million pounds. The Insolvency Service said Howson ought to have known the payment could not be justified by the company's true financial position.
The Insolvency Service, GOV.UKCarillion announced a contract provision of 845 million pounds, 375 million of it for UK construction and 470 million for overseas markets, and Richard Howson stepped down as chief executive. The FCA said the share price fell 39 percent that day and 70 percent within three days.
Carillion said talks with key financial and other stakeholders, including the government, had failed to secure short term funding, and its board applied to the High Court for compulsory liquidation before trading opened. The court appointed the Official Receiver as liquidator, and the company said it expected PwC to be appointed as special managers.
The Cabinet Office said Carillion held about 450 government contracts, equal to 38 percent of its 2016 revenue, and that staff on public contracts would continue to be paid. It said the Official Receiver would investigate why the company failed.
Cabinet Office, GOV.UKThe Financial Reporting Council opened an investigation into KPMG's audits of Carillion's accounts for 2014, 2015 and 2016, and related work in 2017, according to the FRC's later sanctions notice.
The Business, Energy and Industrial Strategy and Work and Pensions Committees published a joint report. It said Carillion had liabilities of nearly 7 billion pounds and 29 million pounds in cash at liquidation, criticised its board and its auditor KPMG, and said the Financial Reporting Council and the Pensions Regulator had failed to act on warning signs.
The FRC opened a second investigation into the audit of certain transactions in Carillion's 2013 financial statements, according to its October 2023 notice.
The Insolvency Service applied to the High Court for disqualification orders against eight current and former Carillion directors under the Company Directors Disqualification Act 1986, following the Official Receiver's reports on their conduct.
The Insolvency Service, GOV.UKThe FCA issued Decision Notices dated 24 June 2022 to former chief executive Richard Howson and former finance directors Richard Adam and Zafar Khan. It proposed fines of 397,800 pounds, 318,000 pounds and 154,400 pounds and found that all three acted recklessly.
Howson referred the FCA's decision to the Upper Tribunal, according to his 2026 Final Notice. Adam and Khan also referred their Decision Notices, which meant the findings against all three were provisional.
An FRC disciplinary tribunal found misconduct by KPMG and former staff in providing false and misleading information to FRC inspectors reviewing the audits of Regenersis and Carillion. KPMG was fined 20 million pounds, reduced to 14.4 million pounds, and former partner Peter Meehan was fined 250,000 pounds and excluded from the ICAEW for 10 years.
The FCA published its Decision Notices. It censured Carillion instead of fining it because the company was in liquidation, and said that otherwise it would have imposed a penalty of 37,910,000 pounds. Carillion did not refer its notice to the Upper Tribunal.
KPMG agreed to settle a 1.3 billion pound lawsuit brought by the Official Receiver on behalf of Carillion's creditors, which alleged it failed to detect misstatements in Carillion's accounts, Bloomberg reported. The terms were confidential.
The Insolvency Service accepted an 11 year disqualification undertaking from Zafar Khan, finance director from 1 January 2017, on 29 June 2023. It said he caused Carillion to rely on false and misleading financial information in its 2016 accounts.
The Insolvency Service accepted a disqualification undertaking of 12 and a half years from Richard Adam, group finance director from 2007 to 2016. It said he caused Carillion to rely on false and misleading financial information in its 2015 and 2016 accounts.
The Insolvency Service accepted an eight year disqualification undertaking from Howson. It said he caused the 2015 accounts to report a profit of 155.1 million pounds instead of 65.3 million pounds, among other matters.
The FRC fined KPMG LLP 26.5 million pounds, reduced to 18.55 million pounds for cooperation and admissions, and KPMG Audit plc 3.5 million pounds, reduced to 2.45 million pounds. Former partners Peter Meehan and Darren Turner were also fined and severely reprimanded.
The Insolvency Service ended its case against former chairman Philip Green, former interim chief executive Keith Cochrane and non-executive directors Andrew Dougal, Alison Horner and Ceri Powell when the proceedings were due in the High Court, the Express and Star reported. It said continuing was no longer in the public interest. Civil Service World reported that none of the five was disqualified.
In a written parliamentary answer, business minister Kevin Hollinrake said the Insolvency Service estimated its costs in the proceedings against all eight directors at 11,064,519 pounds, of which 2,725,000 pounds had been recovered after the three executive directors were disqualified.
After Adam and Khan withdrew their challenges to the FCA's decision, the FCA fined Adam 232,800 pounds and Khan 138,900 pounds. It found both were knowingly concerned in Carillion's market manipulation and Listing Rule breaches.
Howson told the Upper Tribunal on 10 February 2026 that he was withdrawing his reference, and the Tribunal consented on 11 February, according to the FCA's Final Notice.
The FCA fined Howson 237,700 pounds, down from 397,800 pounds, after accepting a lower figure for his relevant income and allowing a 20 percent discount for cooperation. It found he acted recklessly and was knowingly concerned in Carillion's market manipulation between July 2016 and July 2017.
The FRC recommended that Adam be excluded from the ICAEW for 15 years and Khan for 10 years, with reduced financial sanctions of 222,019 pounds and 60,228 pounds. Three unnamed former senior accountants were also sanctioned. The FRC said all five admitted acting recklessly and made no finding of dishonesty.
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The Irish Times · irishtimes.comLast updated 1 November 2026. Spotted an error? See corrections. Every event links to the record it comes from. Allegations are attributed to whoever made them.