Another director has been banned for his part in the cover-tendering scandal that has rocked the demolition industry.
Nicholas Brown, chief executive of the Brown and Mason group, has signed an undertaking not to serve as a director of the firm for seven years after authorizing “compensation payments” in relation to two incidents of hedge bidding, according to the Competition and Markets Authority (CMA).
The competition regulator said Brown accepted the voluntary undertaking after it “put it on formal notice of its intention to apply to the court for a restraining order against him”.
In a statement released yesterday (May 25), the CMA said: “Nicholas Brown has admitted being personally involved in two breaches of competition law affecting demolition services contracts with a total value of more than £30m , including one related to the Shell building on London’s Southbank, and the other related to the Lots Road power station in London.
The CMA said two competitors paid “compensation payments” worth an aggregate of £700,000 (excluding VAT) to Brown and Mason in return for their involvement in the anti-competitive arrangements. Brown was a director of Brown and Mason, but not its managing director, at the time of the incidents.
The disqualification is the latest action by the CMA, which in March fined 10 firms a combined £59.3m “for unlawfully colluding to rig bids for demolition and asbestos removal contracts which involve public and private sector projects”.
He then also successfully secured disbarment deals for former Cantillon director Michael Cantillon (seven years and six months) and former Erith director David Darsey (five years and 10 months).
In its latest statement, the CMA said: “Mr Brown has admitted playing a ‘central role’ in this conduct, including directing staff to collect payments by issuing invoices relating to ‘fictitious services and goods’ which indeed they were never supplied.by Brown and Mason.
“Mr. Brown further acknowledged that, as a shareholder of Brown and Mason, he personally benefited from these payments and that he understood at the time that his conduct was wrong.”
In his plea of disqualification, Brown said: “As a result of my actions … I caused Brown and Mason to engage in conduct that created conditions of competition that did not correspond to normal market conditions.
“I understood at the time that my conduct was wrong. Furthermore, it is clear to me now, and it should have been clear to me at the time, given my position as an experienced director, that these interactions between competitors to agree hedging bids, fixing elements of tender prices and receiving compensation payments carried unacceptable risks of infringing competition law.”
The CMA also revealed that Brown’s seven-year ban would have been shorter if he had cooperated with its investigation earlier.
He said: “Nicholas Brown did not offer an undertaking until the CMA gave him formal notice of its intention to apply to the court for a disqualification order against him. If he had given an undertaking before the CMA issued the formal notice, his period of ineligibility would not have been so long.”
Brown is now disqualified from being a company director or being involved in the management of any UK company for seven years unless he gets court permission.
The CMA’s chief executive of enforcement, Michael Grenfell, said: “Companies’ directors must take personal responsibility for ensuring that their companies comply with competition law.
“People and businesses need to be protected from illegal anti-competitive practices. Company directors who fall short can expect to face the prospect of disqualification.”
