Banned demolition executive to remain director but will step down as MD

The director of a demolition firm found guilty of bid-rigging will keep his position but will step down as managing director.

Paul Cluskey, who had been managing director of Cantillon since the end of 2014, was banned from being a company director for four and a half years by the Competition and Markets Authority in March but appealed the decision. 

Last Thursday, 25 May, the High Court granted him “leave to act”, which, while not technically a reversal of his disqualification, will allow him to continue to serve on Cantillon’s board of directors.

Building understands that Cluskey’s official disqualification will remain on the public register for the duration of the original ban, while a range of stringent conditions were attached to the court’s decision.

The narrow permission bars Cluskey from acting as director of, or in the management of, any other company and involves him stepping back from the role of managing director at Cantillon. 

It also stipulated a need to maintain changes to the composition of the firm’s board of directors and measures to strengthen its competition law compliance processes. 

In a statement, a spokesperson for Cantillon said that nobody would be appointed to be replace Cluskey as managing director.

“As part of the application for leave, Cantillon proposed that Paul Cluskey would step down from the role of Managing Director and serve on a broader team of board directors each with equal standing,” it said.

“The court accepted this proposal, additional directors were subsequently appointed to the Cantillon board, and new joint decision-making processes were put in place. In these circumstances, appointing a new Managing Director is not in our view required.”

It added: “Judge Burton considered that the package of competition compliance measures offered by Cantillon – including a competition law compliance training programme for key personnel, the appointment to the Board of new executive directors, a new non-executive director to supervise competition compliance and the introduction of a tender evaluation panel – were comprehensive, and in her view provided potentially industry-leading competition compliance standards.”

The spokesperson added that it had “cooperated fully with the CMA throughout its and fully supports the important work that it undertakes”.

Cluskey was one of three directors to receive a ban from the cartel-buster in March 2023, alongside David Darsey, a former director of Erith, who was given a five-year and 10-month ban, and Cantillon founder Michael Cantillon, who was banned for seven years and six months. 

A total of 10 firms were fined nearly £60m for their roles in the scandal in which “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]”. 

Five of the 10 were also found guilty of making and receiving “compensation payments” under which, the CMA said, “the designated ‘losers’ of the contracts were set to be compensated by the winner”. 

>> ‘Take a back seat and we’ll give you £500k’: authorities detail why directors were banned in wake of demolition bid-rigging probe

Brown and Mason, Erith, McGee and Scudder were all found guilty of making and receiving compensation payments alongside Cantillon. 

All five were also found guilty of bid-rigging as well, together with Keltbray, John F Hunt, DSM, Clifford Devlin and Squibb. 

Eight firms, including Cantillon, were given reduced fines because they admitted their involvement in cartel activity. 

Cluskey has admitted to having been “personally involved in and/or aware of five of the cover bidding agreements”, referred to as the “admitted infringements”. 

“The admitted infringements with which I was involved related to contracts valued at a total of £58,996,903,” Cluskey admitted. 

On one of the jobs affected by cover pricing was a £5.1m scheme won by McGee at 44 Lincoln’s Inn Fields, which became the site of the Marshall Building for the London School of Economics.

In relation to this bid, Cluskey admitted: “When McGee provided us with feedback on our cover bid, I noted, in an email dated 6 February 2017, that they had inflated our bid by £150,000 and expressed a concern that the arrangement would be spotted by the client. I nevertheless permitted CCH [Cantillon] to submit a tender that acted as a cover price for McGee.” 

Last week, Nicholas Brown, managing director of Brown and Mason Group, became the fourth demolition executive to be handed a ban by the CMA. His penalty starts on 28 July and will run for seven years.