The Financial Conduct Authority (FCA) has begun criminal proceedings against three former employees of Redcentric: former chief executive Fraser Fisher, former chief financial officer Timothy Coleman and former finance director Estelle Croft.

They have each been charged with two counts of making a false or misleading statement, contrary to Section 89 of the Financial Services Act 2012.

Coleman has further been charged with four counts of false accounting, contrary to Section 17 of the Theft Act 1968; one count of making a false or misleading statement to an auditor contrary to Section 501 of the Companies Act 2006; and one count of fraud by false representation, contrary to Sections 1 and 2 of the Fraud Act 2006.

Croft has also been charged with seven counts of making a false or misleading statement to an auditor contrary to Section 501 of the Companies Act 2006, and four counts of false accounting, contrary to Section 17 of the Theft Act 1968.

Redcentric is an IT service firm which provides network, cloud and collaboration services to private and public sector organisations, including the NHS.

On 26 June, the FCA issued a public censure to Redcentric for market abuse. The alleged offending took place between 1 May 2015 and 31 October 2016.

The firm issued unaudited interim results and audited final year results which materially misstated its net debt position and overstated its true asset position in circumstances where it knew, or ought to have known, that the information was false and misleading.

As a result, investors were misled and paid more when purchasing shares than they would have done had they known the true position. Redcentric agreed to offer compensation to affected investors who purchased shares during the period.

The FCA estimated that the losses to affected shareholders to be approximately £43 million. Redcentric estimated that the value of the compensation scheme to potential claimants is £11.4 million and that each claimant will have a basic entitlement to receive an overall value of approximately 17 pence for each net share purchased.

Fisher, Coleman and Croft appeared at Westminster Magistrates’ Court on 23 September.

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