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Release Date: 18th March 2013

To access the original FSA document, click here.


Lamprell plc, a UK-listed company providing engineering and contracting services to the oil, gas, and renewable energy industries, was fined £2,428,300 by the Financial Services Authority (FSA) for serious failings in its financial performance monitoring and controls. The fine would have been £3,469,125 without the 30% discount Lamprell received for early settlement during the FSA investigation.

The fine was imposed due to Lamprell’s inability to keep the market informed about its financial deterioration in a timely manner. Despite Lamprell’s growth and increasing complexity, its financial oversight systems did not develop accordingly, leaving it ill-prepared to accurately assess or communicate financial performance. These inadequacies meant Lamprell failed to issue a timely warning about expected lower profits and revenues, resulting in a 57% share price drop following the announcement.

Specific issues included inadequate project reporting that did not assess performance against the overall financial year’s budget and poor tracking of new business awards and staff utilisation, critical factors that influenced financial outcomes. Lamprell’s internal controls over financial reporting were reliant on outdated and manual processes that could not provide an accurate or timely picture of financial health to the market.

To avoid similar penalties, other firms should:

This case serves as a critical reminder of the importance of maintaining adequate and effective systems and controls to manage financial reporting and market disclosures, especially for listed companies where investor confidence and market stability are at stake.

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