Ex-Redcentric bosses face prosecution after FCA probe

June 25, 2020

Former bosses of Redcentric, an IT software provider, are to face criminal proceedings brought by the City watchdog, it will announce on Friday when it concludes a long-running investigation into the company's finances.

Sky News has learnt that three former Redcentric executives are to be prosecuted by the Financial Conduct Authority (FCA) more than three years after it launched its probe.

The regulator is expected to announce the move at the same time that it unveils an £11m programme to repay former shareholders who lost money as a result of the company's misreporting of assets.

The precise method of calculating the shareholder restitution programme was unclear on Thursday evening.

Redcentric, which is listed on London's junior AIM market, provides managed IT services to public and private sector customers.

In 2016, the company announced that it had overstated its assets by £13m and its profits by £9.5m.

An investigation into the Redcentric affair by the Financial Reporting Council (FRC), the accounting watchdog, led to PricewaterhouseCoopers being fined £4.6m.

Two of the audit firm's partners were fined a combined £280,000 and issued with severe reprimands by the FRC.

Since the departure of its former management team, Peter Brotherton, who was brought in - initially as chief financial officer and now as chief executive - to help rebuild Redcentric, has overseen a steady return to growth.

The company now has a market value of just over £156m, having seen its shares rise by nearly a third during the last year.

Redcentric and the FCA declined to comment on Thursday evening.

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