The UK’s financial regulatory body has issued a warning notice against Carillion, saying the collapsed engineering giant and relevant directors acted “recklessly”.

The Financial Conduct Authority (FCA) said announcements made in December 2016 and in March and May 2017 did not accurately or fully disclose the financial performance of the company.

The FCA said in a statement: “They made misleading positive statements about Carillion’s financial performance generally and in relation to its UK construction business in particular, which did not reflect significant deteriorations in the expected financial performance of that business and the increasing financial risks associated with it.”

The FCA said directors failed to ensure announcements for which they were responsible “accurately and fully reflected” matters.

Carillion collapsed into administration in 2018 with liabilities of almost £7 billion, leading to thousands of job losses.

The FCA said a public censure is proposed, not a financial penalty.

Cat Hobbs, director of campaign group We Own It, said: “These latest revelations on Carillion are shocking. Not only was the company operating a fundamentally unsustainable model and putting our vital public services at risk, it was misleading its own shareholders and trying to cover up its failings.

“The total scandal of Carillion’s collapse should have been a turning point. Instead of hiving off huge chunks of the public sector to dodgy outsourcing companies, our services should be run publicly and in house.”

Unite assistant general-secretary Gail Cartmail said: “It is astonishing that nearly three years after Carillion’s collapse no-one has yet been charged let alone convicted over their actions.

“Without a doubt Carillion had been trading while insolvent for some time before its collapse.

“This was not a victimless white collar crime, thousands of workers lost their jobs. If executives and directors had reported honestly on Carillion’s financial predicament, many of those job losses could have been avoided.

“This case demonstrates everything that is wrong with corporate law in the UK, a failure to act before a company collapses, very slow investigations following a collapse, and then if action is taken it is only a slap on the wrist.

“Public censure is not a sufficient punishment, the guilty should be going to prison.

“The Government needs to get its head out of the sand and introduce legislation which will end this form of bandit capitalism once and for all.”