Jim Armitage: In short, a mess at Carillion
We’re going great guns. We’re brilliant. We’re totally screwed.
That sums up the trading updates Carillion made to the stock market between December 7 and July 10 last year.
After boasting of an “encouraging start to the year” in May, it admitted the truth 10 weeks later: contracts had been grossly overvalued, debts were going through the roof and the chief executive was being fired. Carillion’s shares fell 90% since.
The FCA’s probe into those statements must investigate not only the executives who signed off on them but also the department heads below them, and their juniors.
Were warning signs flagged at the coalface but ignored by managers? Did bonuses skew judgments? Was the business simply too complicated for anyone to understand?
Perhaps the FCA should seek advice from the hedge funds that ignored all Carillion’s assurances and made it the most shorted stock in Britain. If they smelt a rat, why didn’t the bosses?
