DSM the latest to put a number on financial hit of CMA inquiry

Demolition contractor DSM has said the cost of its involvement with the Competition and Markets Authority’s bid-rigging probe will be £1.6m, meaning seven of the 10 firms named last summer have now said the amount they expect it to cost them will be close to £29m.

The company was publicly named last June by the cartel-buster as being involved in the scandal.

DSM has admitted its involvement in bid-rigging, along with seven others. “The bids were rigged by one or more construction firms which agreed to submit bids that were deliberately priced to lose the tender [known as cover pricing],” the CMA added.


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The CMA is expected to publish the level of fines later this month

In its latest report and accounts, the firm said it has made a provision of £1.6m for the “full settlement of a regulatory infringement” – the CMA investigation.

It added: “This settlement related to a single, historical breach of the regulatory rules. The company has cooperated with the associated inquiry and the directors have taken a number of steps, including compliance training, to prevent this from occurring again.”

So far, six other firms (see box) have publicly said what the investigation is expected to cost them in penalties and other costs such as legal fees.

The CMA had been expected to formally announce the level of fines last November but this is now expected to be made this month.

Two firms, Essex contractor Squibb Group and Erith, currently working on the demolition of 120 Fleet Street in the City of London, are contesting the provisional findings.

As well as being guilty of bid-rigging, seven of the 10, including Squibb and Erith, were also accused of making and receiving ‘compensation payments’. John F Hunt, Clifford Devlin and Keltbray are the three firms found not to have participated in making or receiving these payments.

In its accounts for the year to April, Birmingham-based DSM said turnover was up three-quarters to £59m with pre-tax profit up 22% to £11.3m in the year to March 2022. It added that it had racked up other one-off legal costs of £160,000 during the period on top of the near £332,000 it shelled out last time, although the firm said the two numbers were for issues separate to the CMA investigation.

Who has said what they expect the CMA probe to cost them

Careys: £9m

Keltbray: £7m

McGee: £2.4m

John F Hunt: £5.6m

Cantillon: A “maximum” of £1.9m

Brown and Mason: £2.35m

DSM: £1.6m

Clifford Devlin, Erith and Squibb have not publicly said what they expect the probe to cost each of them. The figures also include legal costs. Erith and Squibb are contesting the CMA findings

Source: All figures taken from firms’ most recently filed accounts