Dragonsâ€™ Den star James Caan has revealed his recruitment agency Eden Brown is likely to appeal a Â£1.07 million fine against it, after the firm was yesterday found guilty of participating in a cartel that set fee rates for certain construction companies.
Eden Brown, which is owned by Mr Caanâ€™s HB Human Capital investment fund, was one of six construction labour suppliers to be hit with a total fine of almost Â£40 million by the Office of Fair Trading. The cartel was found to have fixed prices, and collectively boycotted a new competitor in the market, between 2004 and 2006.
Speaking to Construction News, Mr Caan â€“ whose company purchased Eden Brown in 2007, after the actions for which the firms were penalised took place â€“ said he believed the level of the fine was â€œunfairâ€.
The dragon added: â€œThe fine relates to activities prior to the purchasing of the company. We were made aware of the situation when we invested in it and we have co-operated [with the OFT].
â€œI canâ€™t comment further, but I think Eden Brown will appeal the decision.â€
Asked whether he had a message for contractors concerned about the price-fixing scandal Mr Caan again declined to comment, reiterating his group had not owned the firm when the activity occurred.
The competition watchdog â€“ which last week fined 103 construction companies almost Â£130m for anti-competitive behaviour â€“ said the recruitment agencies established a cartel known as the Construction Recruitment Forum in a bid to set prices for some contractors and push Parc, a new entry to the labour market in 2003, out of business.
The companies involved in the cartel were Hays Specialist Recruitment, A Warwick Associates, CDI AndersElite, Eden Brown, Fusion People, Henry Recruitment, Beresford Blake Thomas and Hill McGlynn & Associates.
Beresford Blake Thomas and Hill McGlynn & Associates were granted immunity from fines as they were part of the group that first provided the OFT with evidence of the cartel activity.
The OFT, which said the â€œforumâ€ met five times between 2004 and 2006, named Vinci, Taylor Woodrow â€“ prior to its purchase by Vinci last year â€“ and Atkins as some of the biggest victims of the cartel.
Hays Recruitment said it was actively considering an appeal after it was hit hardest with a whopping Â£30m penalty. It claimed the fine followed â€œan isolated matter arising from the conduct of a single employeeâ€.
Chief executive officer Alistair Cox described the penalty as â€œwholly disproportionateâ€ to its breaches.
The OFT said all parties applied for, and were granted, leniency â€“ except A Warwick Associates which is in liquidation. The total level of fines before reductions for leniency were taken into account was Â£173m.
Eden Brown was granted 35 per cent leniency.