Former Redcentric CFO sentenced to five and a half years imprisonment

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 materially overstated Redcentric’s cash position – by £13.1m and £12.2m respectively – and consequently misstated its net debt position by the same amount each time. When the true position was revealed, shareholders suffered immediate losses in the value of their shares.

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 artificially inflated, which meant that investors paid more to purchase shares than they were actually worth. 

In sentencing Mr Coleman, HHJ Beddoe remarked:

‘Your offending was persistent, significant and substantial, abusing an exceptional degree of trust. Your actions have damaged Redcentric plc and also public confidence in the City. 

‘A CFO of a public company – of any company – is expected to demonstrate the highest standards of integrity. It is the bedrock upon which a company, its directors and its shareholders are entirely dependent. When people such as you are found to have failed seriously they must expect severe punishment.’

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:  

‘The crimes Mr Coleman and Ms Croft committed were serious and caused harm to investors. The sentence handed down today reflects the seriousness of the crimes and should serve as a deterrent to anyone considering committing similar offences. We will now pursue confiscation proceedings against Mr Coleman.’

Estelle Croft, a former finance director at Redcentric, had previously been sentenced to three years’ imprisonment having pleaded guilty to charges of making false statements and false accounting. Ms Croft was also ordered to pay £120,346.70 following confiscation proceedings. 

Notes to editors

1. Mr Coleman stood trial at Southwark Crown Court before a judge (HHJ Beddoe) and jury. The trial started on 01 November 2021 and concluded on 11/02/2022.  
2. A Final Notice was issued to Redcentric PLC on 26 June 2020 regarding these matters. 
3. Timothy Coleman’s date of birth is 3/11/1964 
4. Estelle Croft’s date of is 12/7/1972 
5. Making a false or misleading statement is a criminal offence punishable, on conviction, by a fine and/or up to 7 years’ imprisonment (the maximum sentence was increased to 10 years’ imprisonment for offences committed after 1 November 2021) 
6. Mr Coleman was found guilty of 2 counts of making a false or misleading statement, contrary to Section 89(1) of the Financial Services Act 2012. Mr Coleman was found to have knowingly issued the statements referred to above. 
7. Mr Coleman was further found guilty of 3 counts of false accounting, contrary to Section 17(1)(a) of the Theft Act 1968. 
8. Ms Croft pleaded guilty on 17 August 2021 to 2 counts of making a false or misleading statement, contrary to Section 89(1) of the Financial Services Act 2012, 4 counts of false accounting, contrary to Section 17(1)(a) of the Theft Act 1968 and 7 counts of making a false or misleading statement to an auditor contrary to Section 501 of the Companies Act 2006. 
9. On 9 November 2015, Redcentric PLC published its interim results by means of a Regulatory News Service announcement (RNS). In that RNS, the company’s cash and cash equivalents were falsely over-stated by more than £13.1m, and its net bank debt was under-stated by the same amount. On 16 June 2016, Redcentric PLC published its audited results by means of a further RNS. That RNS over-stated the company’s cash and cash equivalents by more than £12.2m and under-stated its net debt position by the same amount. 
10. The Financial Services and Markets Act 2000 gives the FCA powers to investigate and prosecute making a false or misleading statement, defined by Financial Services Act 2012. 
11. To report market abuse to us or to speak to someone about it, please see our market abuse webpage.