The 32kg beam hit a worker on a third floor scaffold before crashing onto the busy street below.
The beam hit a 38-year-old building worker while he was on an access platform, breaking six ribs and fracturing three vertebrae.
The self-employed subcontractor was in hospital for a week and unable to work for two months.
He was working on construction of the seven-storey South Place Hotel in Wilson Street, EC2, when the incident happened on 5 October 2011.
McLaren Construction was the principal contractor and John Doyle Construction, which is now in liquidation, was a sub-ontractor.
Southwark Crown Court heard that several John Doyle workers were dismantling the temporary structural framework on the sixth floor of the building when they lost control of the six-metre beam.
It fell down the side of the building and hit the worker, who was on a mobile work platform three storeys below, before landing in Wilson Street.
HSE found that John Doyle Construction failed to identify and implement reasonable control measures that should have been in place to prevent any beam from falling in that way.
McLaren approved their subcontractor’s work method statement and also did not identify that controls were lacking.
Neither company took any steps to make sure that no one was working below the areas where the framework structure was being dismantled.
McLaren Construction of Brentwood, Essex, was fined £22,500 with £14,854 in costs after admitting a safety breach.
John Doyle Construction was fined a nominal £1.
The court indicated that had the firm not been in liquidation a £50,000 fine would have been imposed.
After the hearing, HSE Inspector Eileen Gascoigne said: “What happened at the building site that day had the potential to kill one or more workers and members of the public passing close by.
“It was entirely good fortune that the consequences were not even graver.
“The incident was entirely preventable. The risks were foreseeable and the measures that needed to be in place are well-known in the industry and were readily implemented afterwards.
“As an experienced principal contractor, McLaren failed to properly check the controls that John Doyle proposed for the work, and failed to implement their own procedures for ensuring there was no risk to either other contractors, or members of the public, from the work taking place.
“John Doyle was also an experienced contractor and yet it too failed on an important safety issue.”