Company was ordered to pay £25,000 last month for role in rail scam
Alandale has said it is closing its track and civils business with immediate effect following the £25,000 fine it was handed last month for failing to prevent a fraud at the £250m upgrade of Farringdon Station.
Blackfriars Crown Court imposed the fine following the scam which saw four men sentenced to up to two years in prison for offences involving corruption, fraud and money laundering on the central London site where work was carried out by Costain and Laing O’Rourke.
In a statement, Alandale Track and Civils (formerly Alandale Rail) said: “In the judgment of the court, the company had failed to take adequate measures to prevent an elaborate and extensive fraud upon itself.
“The Alandale Group had been wholly unaware of the activities of the four gaoled defendants.”
It said the scam had cost the company £350,000 and had now decided to “dissolve the company with immediate effect” and added: “The Group has put in place controls sufficient to ensure that never again will it be the unwitting vehicle for bribery – or itself the victim of fraud.”
The British Transport Police (BTP) started investigating allegations in February 2011 after a whistle blower at the then Alandale Rail contacted the mayor’s office at City Hall.
Innocent Obiekwe, 42, a senior manager on the project for Costain and Laing O’Rourke responsible for health and safety, received payments from Alandale Rail employees John Zayya, 51, and Kevin McKee, 57, in order to secure a lucrative contract and additional work to supply safety critical staff.
Obiekwe provided information to Alandale Rail, which ensured that they had “a positive influence on the tender process and could undercut bids made by competitors,” BTP said.
The initial value of the contract was £2.1m but eventually rose to £5.2m.
Further payments to Obiekwe were later made through William Waring, 56, to ensure Obiekwe continued to favour Alandale Rail.
BTP added that the corruption did not stop after Alandale won the contract.
Obiekwe and the others were also part of a scheme to defraud Costain and Laing O’Rourke’s joint venture by claiming for ‘ghost workers’ by falsifying invoices and timesheets to create bogus claims for work carried out by safety critical staff working for Alandale Rail.
BTP said Obiekwe received payments in excess of £140,000, along with other gifts and favours.
Obiekwe, Zayya and Waring were all sentenced two years in prison and disqualified from being directors for eight years after pleading guilty. McKee was sentenced to 12 months in prison and also disqualified from being a director for eight years. Alandale was found guilty of corruption.
In its last set of accounts filed at Companies House, Alandale Holdings, which includes the now dissolved track and civils business, posted a £52m turnover in the year to December 2015 with pre-tax profit of £8.1m.