The UK’s financial regulator has fined two former executives at the government contractor Carillion for misleading investors before the construction company’s collapse eight years ago.

Richard Adam and Zafar Khan knew about serious problems in the business but failed to alert investors, the board or the audit committee, the Financial Conduct Authority found.

Adam and Khan have been fined £232,800 and £138,900 respectively, after both former directors dropped their appeal against the FCA findings.

The fines come eight years after the demise of the major government contractor, which was one of the biggest construction and facilities management companies in the country.

Carillion entered liquidation with £7bn of debts in January 2018, resulting in 3,000 job losses and causing chaos across 450 projects and public-sector schemes, including schools, roads, prisons and the expansion of Liverpool Football Club’s stadium.

The disruption delayed the construction of two new hospitals – the 646-bed Royal Liverpool and 669-bed Midland Metropolitan in Sandwell – which were due to open in 2017 and 2018, respectively. The projects ultimately ran hundreds of millions of pounds over budget.

Steve Smart, a director at the FCA, said the collapse of Carillion showed the “serious impact” of people in positions of responsibility not keeping the market “accurately and adequately informed”.

Smart added: “The action taken against Mr Adam and Mr Khan demonstrates our commitment to preventing market abuse and upholding the standards we expect.”

Only months before its collapse, Carillion shocked investors by announcing a £845m write-down owing to problems in its construction projects. The company’s former chair Philip Green was working towards an “upbeat announcement” to investors five days before it announced the charge, and the FCA found that the company’s previous trading update had given no indication that such a step was necessary.

In 2023, the accounting group KPMG was fined £21m by the accountancy regulator for “exceptional” failures in its audits of Carillion between 2013 and 2017.

Khan, who stepped down as finance director after nine months in the job and shortly before the business collapsed, is also facing a ban from holding directorships for 11 years.

Richard Howson, a former chief executive of Carillion, is contesting related findings by the FCA. A tribunal hearing is set for 16 February.