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19.10.18

FCA probe: TfL could be fined for not telling LSE about Crossrail delay

The UK’s financial watchdog is considering whether to launch a formal investigation into TfL over its reported failure to tell the London Stock Exchange (LSE) that the Crossrail project would suffer a nine-month delay to its launch.

A statement made by TfL to the LSE on 24 July made no mention of Crossrail’s delay. Yet, following questioning by the London Assembly, it emerged that the transport body already knew the scheme would not open on time.

Added to that was the fact that the capital’s mayor, Sadiq Khan, told assembly members on 6 September that Crossrail had not informed him of the delay until 29 August. It then surfaced that he had been told of the project’s “increasing pressures” on 26 July.

Earlier this month, the committee’s chair, Caroline Pidgeon MBE AM, wrote a strongly-worded letter to Khan accusing him of misleading assembly members by claiming that he wasn’t aware of the setbacks – and, if he indeed wasn’t, it was only to allow him and DfT ministers “a degree of plausible deniability about the inevitable delay in the launch date.”

Pidgeon said this was “completely inappropriate” and damages the reputation of everyone involved.

Concerned about an alleged lack of transparency in this process, the committee wrote to the Financial Conduct Authority (FCA) for clarification on the issue.

The FCA’s chief executive, Andrew Bailey, has now responded by confirming that it is considering whether to move ahead with a formal investigation via its Enforcement Division.

If it indeed finds that rules were breached, the FCA could slap TfL with a fine, which will come as dreary news given that the organisation is heading towards a huge deficit and is attempting to cut costs wherever possible.

The fine would be at the FCA’s discretion. Its list of fines for this year show that the highest one, given to Tesco, amounted to a whopping £16.4m due to a data breach. The smallest penalty so far, of £250,000, was handed to a former Royal Bank of Scotland trader.

“We are aware of and are reviewing the issues referred to in your letter, with a view to determining whether it is appropriate for us to exercise any of our statutory powers. As part of this review we may use the information gathering powers available to us to seek further information from the subjects of the enquiry,” Bailey wrote.

In a statement, Pidgeon reiterated that her committee identified “grave discrepancies” in the evidence gathered from meetings to determine “who knew what, when, with regard to the launch of Crossrail.”

“We can only conclude that we have been misled – and now the financial markets will want to know if they have been misled too,” she added. “Not being transparent about such a large infrastructure project affects many people and many businesses. Any misconduct should be taken very seriously.

“We expect the mayor and TfL to fully comply with any requests from the FCA. This Crossrail debacle has knock-on effects across London’s transport system and accountability for poor management is imperative.”

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