Former Schal chief Malcolm Bairstow to lead team auditing contracts in the run-up to the sale.
LAING HAS called in Ernst & Young to audit contracts in the run-up to the sale of its construction arm.

The decision to bring in the team follows the writing-off of £40m from year-end profit, largely because of difficulties at the National Physical Laboratory at Teddington, south-west London. The firm also suffered a £26m loss at the Cardiff Millennium Stadium.

The Ernst & Young team is led by former Schal managing director Malcolm Bairstow, a partner in the firm's UK real estate consulting division.

Industry insiders claim that the issue of contracts is crucial to the success of the sale as potential buyers are reluctant to take on problem contracts, or may agree only if warranties cap losses.

One insider said: "They will be called in to keep a watching brief on a number of contracts. This is a key issue in the sale." Laing finance director Adrian Ewer confirmed that Ernst & Young was advising the group.

He emphasised that the consultant was looking at a small number of contracts and that the monitoring was not at the behest of any potential buyer. He denied that Ernst & Young's brief would extend to further contracts.

Ewer said: "We have a variety of advisers. Ernst & Young is one of them. We have had them look at various times over the last few years. This is the group management using advisers. There is no story in this." Ewer was tight-lipped about how near Laing was to selling off the construction arm. The decision to sell was first announced in November. He said: "The process is on programme. It's going fine. That's all we will say." It is unclear how many firms are in the running to buy the operation. At the time of the £40m write-off at the end of January, it was understood that five firms had expressed interest.

Shopping developer Westfield had earlier said it has pulled out of the running.

Laing put back the official announcement of its year-end results to late April to allow more time for the sale of the construction and US housing arms.

Bairstow, who left Schal after a 14-year stint in 1999, joined Ernst & Young last spring. His brief was to build on the group's construction-related consulting activities. Before stepping down from Schal, Bairstow was in charge of high profile projects including the £220m refurbishment of the Royal Opera House and the £140m conversion of Bankside Power Station into the Tate Modern, which opened last year.

Laing’s history of construction woes

November 1999 Laing stuns industry by pulling out of competitive tendering. The move will lead to a £400m less turnover and 850 job cuts.
Sept 2000 Laing chairman Jim Armstrong says merger could be on cards, following £19m losses announced by construction arm
November Laing puts construction arm up for sale. Price of £100m mooted as possible sale price
December Rival contractors target bid to poach disgruntled Laing staff following construction sale announcement
January 2001 Australian shopping developer Westfield pulls out of bidding for the construction arm
February Laing writes £40m from end of year profits. Problem job at National Physical Laboratory PFI blamed largely for the write-off