FCA Enforcement Action ' Former CFO And Finance Director Of AIM-listed Company Convicted For Misstated Results

• Published date: 28 February 2022
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Financial Services, Corporate and Company Law
• Law Firm: Herbert Smith Freehills
• Author: Mr Mark Bardell, Mike Flockhart and Antonia Kirkby

Following criminal proceedings brought by the Financial Conduct Authority (FCA), the former chief financial officer and the former finance director of Redcentric PLC have been convicted of:

• making false or misleading statements, contrary to section 89(1) of the Financial Services Act 2012; and
• false accounting, contrary to section 17(1)(a) of the Theft Act 1968.

The proceedings were brought after Redcentric, an AIM-listed company, issued unaudited interim results in November 2015 and audited final year results in June 2016 which materially misstated its net debt position and overstated its true asset position by the same margin. The misstatement was discovered when the company's audit committee undertook an internal review of its subsequent interim results in November 2016.

The FCA censured Redcentric itself for market abuse in connection with the issue in June 2020 but did not fine the company. This was in part because the company had put in place a scheme to compensate affected purchasers of its shares (see our blog post here).

The former finance director, Ms Croft, was...