According to Rail Technology Magazine – Carillion is currently under investigation by the UK’s Financial Conduct Authority. The independent financial watchdog is looking into the “timeliness and content” of announcements made by Carillion in a period between 7 December 2016 and 10 July 2017. A spokes person for Carillion said that it was “cooperating fully with the FCA” on the investigation.
The construction giant was involved in a variety of deals with Network Rail, and recently won two major contracts worth £300m, which involved track maintenance and electrification.
It is also ranked as the infrastructure owner’s second biggest supplier in its 2016/17 suppliers list receiving more than 5% of Network Rail’s total expenditure.
Today’s news comes after a difficult year for Carillion, with its former chief executive stepping down in July and future CEO Andrew Davies set to take over on 22 January.
In November 2017, Carillion issued its third profit warning in five months and its shares crashed 60% when the stock market opened – their lowest-ever levels. It has been reported that the struggling firm also has debts of £1.6bn.
In July last year, its shares plunged 39% as bosses warned that annual results would be “below management’s previous expectations” and wrote off £845m.
Early in the year, in April, the firm was mired in controversy when the RMT union vowed to fight against job cuts that were warned as a result of Network Rail shrunken renewals portfolio.
Despite the financial controversies, Carillion remains a major player in the rail industry. It is set to be involved in two of the JVs which won slices of the £6.6bn HS2 construction contracts awarded in July last year as well as to deliver a major part of the Midland Main Line improvement programme.