An engineering and consulting company has been fined nearly £13 million by the Financial Conduct Authority (FCA) under Section 91 of the Financial Services and Markets Act 2000, after it published inaccurate information in its full-year 2022 and 2023 financial results and its half-year 2024 results.

The FCA found that the company had operated a poor financial culture, resulting in poor practices around accounting judgments in certain units of the company. Its control framework was insufficiently robust to ensure that, where accounting judgments needed to be made in relation to its projects, they were made appropriately and in compliance with applicable accounting standards. This resulted in inappropriate accounting judgments being made concerning certain projects, as well as a lack of transparency with the company's auditors.

The company had recognised a $140 million exceptional charge in its half-year 2024 results, a significant part of which was not characterised as prior-year accounting errors, as it should have been, and was not disclosed to its auditors and board until shortly before the half-year 2024 results were announced. The company left its auditors with insufficient time to review the proposed charge and assess whether it related to the first half of 2024 or arose from inappropriate prior-year accounting judgments.

The company's full-year 2023 results had reported an operating profit of $38 million and adjusted EBITDA of $423 million. According to its full-year 2024 results, those numbers should have been an operating loss of $55 million and adjusted EBITDA of $378.2 million.

The FCA concluded that the company had breached Listing Rule 1.3.3R (a listed company must take reasonable care to ensure that misleading information is not published) and Listing Principle 1 (a listed company must take reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with its obligations).

After considering the seriousness of the breach, aggravating and mitigating factors and the objective of credible deterrence, the FCA arrived at a financial penalty of £18,562,500. As the company had accepted the FCA's findings, a 30 per cent discount applied and a financial penalty of £12,993,700 was imposed.