Knowles bidder Systech headed by cleared fraud case defendants

Two bosses at consultant Systech, who were this week poised to put in a new bid for Knowles, were among the six defendants in the collapsed Jubilee Line fraud trial last year, QS News has learned.

Systech's directors Stephen Rayment and Mark Woodward-Smith were acquitted of charges of bribing London Underground executives last March.

The two ran RWS when the charges were brought against them, which has since been rebranded to Systech. The trial was one of the longest in British legal history, lasting 21-months and costing an estimated £60m. Rayment was made managing director of RWS in 1991 after previously running the Amtech group of companies.

A Systech spokesperson stressed that both men had "clear consciences" in the wake of the collapsed trial. "They were cleared of all charges," she said. "As far as they are concerned it's old news. They are now looking forward to the future and to growing Systech."

Stephen and Mark are now looking forward to the future and to growing Systech

Systech spokesperson

Establishing that Roger Knowles was fully aware of the history during his discussions with Systech, she added that "it was openly discussed". She also explained that Systech's rebranding was due to the firm broadening its service offering. "RWS was very much a QS. The nature of the business has now changed and the company is working in different sectors such as defence and the law."

The spokesperson also confirmed this week that Systech had written to Knowles' advisors requesting to know the minimum share price that would be acceptable to the firm. Systech's 25p a share bid, which valued AIM-listed firm Knowles at £5.25m, was rebutted by Knowles before Christmas.

Systech's turnover is expected to hit £19m for the year to 31 March 2006. Its last published results saw pre-tax profits of £1.2m on turnover of £13m for 2004/2005.

The nature of the business has now changed and is working in different sectors such as defence and the law

Systech spokesperson

The report said the firm had created a separate brand called International Contracts Consultancy, which concentrates on regions such as Europe, the Middle East, Asia and America. "The managing directors expect the international turnover to significantly increase over the next few years," the report said.

Knowles' last results saw pre-tax profits stand at £534,000 for the year to 31 July 2005 on turnover of £30.2m.

A possible sale of the business emerged after chairman and founder Roger Knowles put his 62% stake in the business up for sale, having announced that he would stand down from his role at some point this year.