Irish firm fined €10,000 following cartel investigation

Flooring firm got huge State contracts despite bid-rigging probe into sister company

 The newly-built  Central Bank of Ireland on North Wall Quay in Dublin:  Crean Mosaics, sister company of Aston Carpets and Flooring, recently completed €1.8 million of work on the new Central Bank headquarters.  Photograph: Alan Betson / The Irish Times

The newly-built Central Bank of Ireland on North Wall Quay in Dublin: Crean Mosaics, sister company of Aston Carpets and Flooring, recently completed €1.8 million of work on the new Central Bank headquarters. Photograph: Alan Betson / The Irish Times

 

The sister company of a flooring firm convicted of bid rigging on major building projects received millions of euro from State-funded projects, even after criminal charges were filed against the other group company.

The State projects include the new Central Bank building and new divisional Garda headquarters at Kevin Street in Dublin, as well as hospitals and schools.

Aston Carpets and Flooring (ACF) was on Wednesday fined €10,000 following a cartel investigation into collusion on contract tendering with rival firm Carpet Centre Contracts (CCC) between 2011 and 2013.

A former director of ACF, Brendan Smith, was also convicted at the Central Criminal Court and received a suspended three-month prison sentence and a €7,500 fine.

The prosecutions followed a four-year probe by the Competition and Consumer Protection Commission (CCPC), and are the first criminal convictions for bid rigging in the history of the State.

Over two years of secret meetings in a Dublin cafe, agreements were reached between ACF and CCC, “two of the biggest players in the market”, about the prices to quote for 16 flooring projects for multinationals such as Google. They effectively then conspired to carve up several contracts between them.

A director of CCC co-operated with the commission’s investigation through its cartel immunity programme to avoid prosecution.

ACF is a sister company of Crean Mosaics, which trades as Aston Crean and recently completed €1.8 million of work on the new Central Bank headquarters. It also landed a €750,000 contract for the new Kevin Street Garda station.

Aston Crean’s website also lists a slew of other State projects including for hospitals, universities, court houses and local authorities.

The convicted company, ACF, and Crean Mosaics are registered to the same Mayo address with the same offshore shareholders and also share directors. Aston Crean’s website describes ACF and Crean as part of the same “group”.

Company office records show they are both owned by Isle Of Man companies, Crean Group Overseas and Crean International. Both are ultimately controlled by Mayo businessman, Alan Crean, who accepted the book of evidence on behalf of ACF prior to the criminal trial.

Mr Crean and Brian Ruane, the Mayo-based managing director of Aston Crean, are listed as directors of both companies. Along with Mr Smith, the two Mayo men were on the board of ACF while it engaged in price fixing.

The court was told that in 2007, five years before the bid rigging investigation, Crean Mosaics “bought” ACF, which has since been effectively wound down.

The CCPC’s bid rigging investigation was first revealed in The Irish Times in 2013, and focused on 16 contracts, many for major multinationals. The investigation was sparked by a whistleblower complaint.

Several of ACF’s projects for several major companies including Google, Mastercard, Dell and PayPal, were targeted in the investigation. It is not suggested that the State contracts won by Crean Mosaics, ACF’s sister company, were subject to price fixing and they were not part of the investigation.

When queried about the hiring of Crean Mosaics to work on its headquarters, in the conext of the bid-rigging history of ACF, the Central Bank said responsibility for hiring it rested with main contractor, Walls Construction.

The bank said it followed all public procurement rules, while Walls did not respond to a request for comment.

The OPW said main contractor JJ Rhatigan was responsible for hiring Crean for Kevin Street Garda station. JJ Rhatigan did not respond to a request for comment.

The Department of Public Expenditure and Reform said it views the matter “very seriously” and said there is a regime in place to protect against it in public procurement.

Alan Crean, chairman of Crean Mosaics, said he had “no comment to make whatsoever” on ACF’s conviction or Crean Mosaics’ State contracts. CCPC said bid-rigging is a seriuous crime that “distorts” competition and hurts consumers and taxpayers.