The Financial Conduct Authority (FCA) is probing allegations of insider trading in Carillion’s shares prior to its collapse, it has emerged.
The news came to light in a letter to Labour MP Frank Field, one of the two MPs heading up the Carillion Joint Inquiry.
A National Audit Office report published earlier this month revealed that, in Carillion’s request for government support before its collapse, it asked for "protection from the imposition of fines or penalties by regulators for actions taken by the company before July 2017".
Field wrote to the Cabinet Office, former Carillion director Philip Green, and the FCA, asking about the request, whether such request are normal, and how they are handled.
Green responded that the lenders Carillion was trying to secure last-ditch funding from insisted on such a request as a condition of potential further lending.
Meanwhile the FCA made it clear that the request was never passed on to it but that it would rarely alter the sanction it applied as a result of an investigation but it also added that it was examining examples of insider trading.
In its letter to Field, it said: "Our investigation is into the timeliness and content of the firm’s announcements. Our primary focus is to determine whether the matters announced in Carillon’s trading update on 10 July 2017 were identified and announced at the appropriate time.
"We are also considering whether earlier announcements made by Carillon were false or misleading as a result. This includes Carillon’s £845m contract provision as well as Carillion’s revised expectations as to revenue, profit and debt levels that were also announced on 10 July, Our investigation currently covers potential breaches of the Market Abuse Regulation, Listing Rules and Listing Principles.
"We are aware of allegations or insider trading in Carillion’s shares prior to its trading update on 10 July 2017 and are looking into them."
