McAlpine suing Eastern Contracting shareholders

Alfred McAlpine is suing five former shareholders of Eastern Contracting Holdings (ECH), claiming that it was misled into paying over £5 million too much for the company.

The contractor claims that it received false and misleading information and warranties and profits were overstated when it bought ECH in 2002. Alfred McAlpine Utility Services Group has issued a High Court writ against five former ECH shareholders – Michael Dodson, Andrew Smith, Mark Jones, Andrew Mayes and Alan Ward – claiming that the £10.2 million it paid for the company was actually double its real worth.

The writ also claims that there were more than 3000 missing time sheets; accountancy costs were not included; and that £300 000 had to be written off after the acquisition. Insiders close to the original deal claim McAlpine had full and open access to Eastern Contracting’s accounts before the deal during an extensive four-month due diligence period. The purchase followed a tough 2001 for Eastern in which it was crippled by the foot-and-mouth crisis – one-third of turnover was affected.

Michael Dodson, one of the five ECH shareholders named, said: “We are terribly disappointed to receive a claim of which we had no notification, even though McAlpine should have notified us. We feel very exposed – five individuals being pursued by a large plc.” The five are now instructing their defence lawyers in a case that could run into years.

Alfred McAlpine sold off parts of the ECH subsidiary earlier this year to Southern Electric Contracting. SEC plans to reintroduce the Eastern brand as it has with SWALEC Contracting.