Lamprell, the UAE oil rig maker, has been fined £2.4 million (Dh13.3m) by the London market regulator for failing to inform investors of its deteriorating financial position fast enough.
The United Kingdom's Financial Services Authority said "serious systems and controls failings" at the UAE-based firm had prevented it from adequately monitoring financial performance and informing the market of potential profit setbacks.
The company, which lists its shares in London, employs 11,000 people at sites including its three yards in Hamriyah, Sharjah and Jebel Ali. It also operates facilities in Saudi Arabia and Kuwait.
"Lamprell could not adequately monitor its financial performance against its budget and against market expectations and therefore failed in its obligations as a listed company to keep the market fully informed of its deteriorating financial position," the regulator said.
Shares of Lamprell dropped 2 per cent to 145.2 pence yesterday in London midday trading. It has shed 60 per cent of its value since May.
The fine is the latest fallout from a series of negative performance announcements that began after Lamprell completed the US$336 million (Dh1.23 billion) buyout of Maritime Industrial Services, a rival equipment engineering company.
Lamprell's growth outpaced its financial reporting system, said the British authority.
"Lamprell's systems and controls may have been adequate at an earlier stage, but failed to keep pace with its growth," said Tracey McDermott, the regulator's director of enforcement and financial crime. "As a result they were seriously deficient for a listed company of its size and complexity, meaning it was unable to update the market on crucial financial information in a timely manner."
When Lamprell began issuing profit warnings in May, shares dropped by 57 per cent.
In October, the chief executive Nigel McCue stepped down after the company's fourth profit warning. Two other directors left the board at the same time.
James Moffat, a former liquefied natural gas executive, joined the company as chief executive this month.
The financial troubles arose from delays in delivering two specialised vessels designed to install offshore wind turbines. Lamprell entered the $320m contract with an eye towards diversifying into renewables from its oil and gas client base.
The fine was the first levied by the FSA under new rules that tie the size of fines to market capitalisation. The £2.4m fine includes a 30 per cent discount for settling early.
"The board recognised that it was in the best interests of the company to accept the position reached with the FSA, so as to avoid incurring significant additional expenses and expending the further time that would be required to pursue the matter," said John Kennedy, Lamprell's chairman. "This settlement draws a line under the investigation by the FSA and the matters to which it relates."