The Leading News & Information Service For The Facilities, Workplace & Built Environment Community

All Out - CMA Hits Cartel For Six

A total of six directors have accepted disqualification because of their involvement in cover bidding on fit-out contracts.
07 August 2019
 

The CMA has secured the disqualification of three more office fit-out company directors for illegal cartel behaviour, bringing the total number to 6.

All three were directors of companies within the Fourfront Group at the time the illegal cartel activity took place.

Clive Lucking, founder and CEO of the Fourfront Group, has been disqualified for a period of 4 years and 9 months. Aki Stamatis, Chair of the Fourfront Group, has been disqualified for a period of 2 years and 9 months and Sion Davies, Managing Director at Area Sq. Ltd, has been disqualified for a period of 1 year and 6 months.

Clive Lucking contributed to 10 breaches affecting contracts with a total value of over £11.9 million. Aki Stamatis contributed to one of these breaches and took no steps to avoid the other 9 breaches even though he had reason to suspect or should have known about them. Sion Davies contributed to the illegal conduct by failing to prevent 3 breaches affecting contracts with a total value of £8.6 million.

 

Fines

In March 2019, five companies agreed to pay fines totalling £7 million after the Competition and Markets Authority (CMA) found they had broken competition law by engaging in a form of collusive tendering known as 'cover bidding'.

Typically, cover bidding involves companies, when bidding in a competitive tender for a contract, agreeing with each other that one or more of them will place a bid that is deliberately intended to lose the contract, thereby reducing the intensity of competition. This type of illegal behaviour can lead to customers paying an artificially inflated price or receiving poorer quality services than if the companies had competed properly in the tender process.

 

Whistle blower

The five companies fined were Fourfront, Loop, Coriolis, ThirdWay and Oakley. A sixth company, JLL got away without paying towards the fine after blowing the whistle on its accomplices.

JLL brought information about the conduct to the Authority's attention and thus, under the CMA's Leniency Programme walked away almost scot free. In May this year, the CMA secured legally binding disqualification undertakings from Robb Simms-Davies a former director of the JLL group of companies.

Trevor Hall (former director of Cube Interior Solutions Ltd, part of the Fourfront Group) and Oliver Hammond (former director of Area Sq. Ltd, part of the Fourfront Group) were also disqualified at that time.

 

Harsher sentences

Clive Lucking, Aki Stamatis and Sion Davies initially declined to give disqualification undertakings but have now done so after the CMA put them on formal notice of an intention to apply to the court for disqualification orders against them.

Had they given undertakings before the CMA issued the formal notice, their periods of disqualification would not have been as long.

Giving an undertaking means they agree to be disqualified from being a director of a company or otherwise being involved in the management of any UK company, unless they have the permission of the court.

The undertakings will take effect on 7 October 2019. This allows the directors time to apply to the court for permission to carry out specified director duties.

 

Twelve

The total number of director disqualifications secured for illegal cartel behaviour is 12 since December 2016, when the CMA began actively using this power.

 

 

Company Directors Disqualification Act

Under the Company Directors Disqualification Act, the CMA has the power to apply to the court to disqualify a director from holding company directorships or performing certain roles in relation to a company for a specified period, if a company of which he or she is a director has breached competition law. The Act also allows the CMA to accept a disqualification undertaking from a director instead of bringing proceedings, which has the same legal effect as a disqualification order.

As a former director within the JLL group, Robb Simms-Davies would have been immune from director disqualification but had his protection withdrawn because he did not submit to a voluntary interview with the CMA. Continuous and complete cooperation with the CMA’s investigation is a condition for leniency.

 

If you want to report cartel-like behaviour - Click Here

 

To learn more about avoiding behaviour likely to lead to disqualification - Click Here

 

Picture: Gary Chandler is the new Chief Executive of the Fourfront Group. According to the company's website 'Clive Lucking [former CEO] will be stepping back from the day to day involvement in the UK business, focusing on driving a strategic growth plan into Europe.

Article written by Brian Shillibeer | Published 07 August 2019

Share



Related Articles

Controlling FM Costs Roundtable with JLL

CAFM company JLL Technologies is interested in the voices of leaders in the FM private and public sectors – as such, a diverse board was invited to a roundtable...

 Read Full Article
Andron FM Awarded JLL Soft Services Contract

Andron Facilities Management, the national soft FM provider, has signed a five-year deal with JLL Property & Asset Management UK. The new national contract...

 Read Full Article
Bouygues and Equans Merger Accepted by CMA

The Competition and Markets Authority has confirmed that it will not refer the merger of Bouygues and EQUANS to a Phase 2 review. The competition regulator has...

 Read Full Article
Bouygues and Equans to Withdraw One of Their HS2 Bids

The Competition and Markets Authority has accepted that the least “economically advantageous” bid will be removed from the competitive tender, in the latest...

 Read Full Article
Bouygues and Equans Offer Proposals to Address CMA’s HS2 Contract Concerns

In the latest update of the Competition and Markets Authority’s inquiry into a possible breach of competition law by the merger of Bouygues and EQUANS, the two...

 Read Full Article
JLL Acquires Envio Systems

JLL is to acquire Envio Systems, a cloud-based IoT platform for enhanced performance and operations of commercial buildings. The Berlin-based company’s smart...

 Read Full Article
Concerns Raised for Bouygues and Equans HS2 Bid

Bids from Bouygues and EQUANS for overhead power cable contract work for HS2 could constitute a breach of competition law. The Bouygues buyout of Engie’s FM...

 Read Full Article
10 Construction Firms Involved in Contract Bid Rigging

The Competition and Markets Authority has provisionally found that ten construction companies have been involved in “illegal cartel agreements” when...

 Read Full Article
Former JLL Integral MD to Co-Lead Expansion of New Decarbonisation Platform

A machine learning based decarbonisation solutions business is launching in the UK, after raising $5m in pre-Series A funding. Ecolibrium’s Head...

 Read Full Article
Mitie’s CMA Investigation – What’s the Latest?

The Guardian reported that the UK competition regulator raided Mitie’s offices after an accusation of breaking competition law, but what do we know so far about the...

 Read Full Article