Bid-rigging: Renew considers Allenbuild fine appeal

Renew Holdings is considering an appeal against the OFT's decision to fine its subsidiary Allenbuild £500,000.

In a statement to the City, the company said: "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.

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 Midlands office of Allenbuild, which no longer exists.

The company said that no employees connected with the infringements remain with the Group and that prior to the OFT investigation, the Board of Renew was unaware of the infringements, which took place prior to the appointment of the current Group Executive directors.

It added that the company has reinforced its tendering procedures since the start of the OFT's investigation and that the practice of cover pricing is not regarded as acceptable within the Renew group of companies.

Renew also said that it did not consider itself liable for any infringement in respect of Bullock Construction, 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. But the board of Renew said it was "totally unaware" of the circumstances surrounding the infringement as there are no records remaining within the Group. Renew added that it was unaware of the OFT enquiry into Bullock Construction at the time of the June 2007 announcement.