Last checked at 22 Sep 2009 08:38
Renew Holdings plc
('Renew' or the 'Group')
Re OFT Investigation
Renew has received the decision from the Office of Fair Trading ('OFT') following its investigation into tender activities within the construction sector.
The OFT has determined that a fine of £0.5m will be levied on Allenbuild Limited ("Allenbuild"), one of its subsidiaries, and Renew. Renew is taking legal advice on the probability of appealing against the level of this fine and is considering whether any provision in respect of this fine should be made in the Allenbuild and Renew accounts for the year ending 30 September 2009.
In 2007, Renew announced that Allenbuild had been contacted by the OFT in relation to some historic contract tenders. Renew and Allenbuild have cooperated fully with the OFT throughout its investigation.
Under the OFT's Fast Track Offer Allenbuild made two admissions of participation in cover pricing activities in respect of two tenders which occurred in 2003 and 2004 in the, now closed, Midlands office of Allenbuild. No employees connected with the infringements remain with the Group. Prior to the OFT investigation, the Board of Renew was unaware of these infringements, which took place prior to the appointment of the current Group Executive directors.
Immediately following the commencement of the OFT investigation, Renew introduced reinforced group wide tendering procedures. These guidelines and controls are in place to ensure that all subsidiaries comply with competition laws. Compliance with these procedures is audited on a regular basis. The practice of cover pricing is not regarded as acceptable within the Renew group of companies.
The decision also finds against Bullock Construction Limited ("Bullock"), a former subsidiary of Renew which was sold in September 2005 to a company controlled by Bullock's management, and Renew. The alleged infringement occurred in 2000. The OFT claims that Renew should be held jointly and severally liable for the fine of £3.0m imposed on Bullock. The Board of Renew is totally unaware of the circumstances surrounding the infringement as there are no records remaining within the Group. Renew was unaware of the OFT enquiry into Bullock Construction Limited at the time of the June 2007 announcement.
Renew does not consider that it is liable for any infringement in respect of Bullock and is taking advice on appealing the OFT's finding. No provision will be made in respect of that fine in the accounts of Renew for the year ending 30 September 2009.
22 September 2009
Enquiries:
| Renew Holdings plc | |
| Brian May, Chief Executive | Tel: 0113 281 4200 |
| John Samuel, Group Finance Director | |
| College Hill | |
| Mark Garraway | Tel: 020 7457 2020 |
| Adam Aljewicz | |
| Brewin Dolphin | |
| Andrew Kitchingman | Tel: 0113 2410187 |