Two former finance chiefs at a London-listed IT firm have been found guilty of misleading investors after they falsified the company’s accounts.
Timothy Coleman, the former chief financial officer of Redcentric, used false figures to assure key investors about Redcentric’s financial position. At an earlier stage in proceedings, a second defendant, Estelle Croft, a former finance director at the company, pleaded guilty to charges of making false statements, false accounting, and making false statements to auditors, PwC.
Both Defendants overstated Redcentric’s cash position – by £13.1m and £12.2m respectively – and misstated its net debt position by the same amount each time. As a result of the false statements, the share price of Redcentric was artificially inflated, meaning investors paid more to purchase shares than they were actually worth.
Croft was sentenced prior to this trial to a total of three years’ imprisonment, and was ordered to pay £120,346.70 following confiscation proceedings. Coleman will be sentenced on 3 March 2022.
The FCA commented that “While Redcentric has done the right thing in compensating affected shareholders, this case shows the FCA will bring criminal cases against company directors and other officers and hold them personally to account when their conduct damages UK markets.”