TWO businessmen jailed last month for lying to shareholders were yesterday ordered to pay £981,755 in compensation and confiscation orders.

Carl Rigby, former chairman of the listed software group AIT, and Gareth Bailey, former chief financial officer, were told to make the payments out of their own pockets.

Rigby, 43, now serving 3½ years, was ordered to pay £840,069. Failure to pay would increase his sentence by 18 months, he was told at Southwark Crown Court.

Bailey, 36, who is serving two years, was told to pay £141,686, with the threat of an extra nine months’ jail if he failed.

In the confiscation hearing, Judge Christopher Elwen ruled that, as a major shareholder in AIT, Rigby had benefited from the misleading trading statement at the heart of the case, even though he never cashed in his shares.

The case was the first successful criminal prosecution for market abuse by the Financial Services Authority.

The two men duped shareholders and company advisers by booking bogus deals as genuine sales so that they could falsely claim that they would meet sales and profit targets.

The lies sustained the share price for a while, but it collapsed in June 2002 when AIT issued two profit warnings: £90 million was wiped from the value of the £100 million company. The two men had shown a reckless disregard for investors, the judge said, and had damaged the integrity of the stock market.

Of Rigby’s payments, £208,796 will go to burnt shareholders who applied for compensation, £381,273 of confiscated assets will go to the Treasury and £250,00 will go towards FSA costs. Bailey’s payment will be used to compensate shareholders.

The prosecution of the AIT directors is in marked contrast to the treatment of Sir Philip Watts, Shell’s former chairman, against whom the FSA dropped all proceedings this week.

Shell had been found to have misled shareholders over its oil and gas reserve levels, but no directors have been held to account.

Neil Mirchandani, a litigation partner with Lovells, said of the AIT case: “The FSA has plainly gone in very hard on this one. Given what happened at Shell, they’ll probably feel a bit happier with themselves in the light of this one.”

The court heard that Rigby had assets of at least £3 million while Bailey was worth £158,000. The FSA revealed that its total investigation and litigation costs were £1.96 million.