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Financial regulator secures confiscation order against convicted CFO - London TV

Financial regulator secures confiscation order against convicted CFO

by London-TV in Business

On 2 November 2023, Southwark Crown Court imposed a Confiscation Order of £355,369 against Timothy Coleman, former Chief Financial Officer of Redcentric Plc, following his convictions in February 2022 for false accounting and making misleading statements to the market.

Mr Coleman is currently serving a five and a half year prison sentence for these offences.

Redcentric, an IT service provider and AIM-listed company, issued false and misleading unaudited interim results in November 2015, and false and misleading audited final year results in June 2016. Both statements materially overstated Redcentric’s cash position – by £13.1m and £12.2m respectively – and consequently downplayed its debt. Shareholders suffered losses when the true position was revealed.

Mr Coleman had inflated the cash position that was presented to the Redcentric Board and had used the same false figures to assure key investors about Redcentric’s financial position, persuading them not to sell down their investment in the company. As a result of the false statements, the share price of Redcentric shares was inflated, meaning investors paid more for shares than they were worth.

The confiscation order of £355,369 represents the value of Mr Coleman’s financial benefit from these offences. The Court imposed a default prison sentence of three and a half years on Mr Coleman, meaning that if he does not satisfy the terms of the confiscation order within a month, he will be liable to serve this further term of imprisonment in addition to the five and a half years he’s already serving.

In addition to the confiscation order, the Court ordered that Mr Coleman pays £119,630 of prosecution costs.

Steve Smart, Joint Executive Director of Enforcement and Market Oversight, said:

“As CFO of a public company, Mr Coleman was supposed to uphold the highest standards of integrity on which his shareholders depended. By cooking the books and misleading the market, he caused serious harm to those people – this order sends a signal to anyone who misleads the market that they will be liable to pay even when they’re behind bars.”