A Meath man has been given a suspended sentence for taking part in a 'carpet cartel'
The price-fixing involved one of Ireland’s biggest commercial flooring firms, Aston Carpets.
A BUSINESSMAN BEHIND one of Ireland’s biggest commercial flooring firms has been handed a suspended sentence and banned from serving as a company director after being caught in a price-fixing scam.
Following an investigation by the Competition and Consumer Protection Commission (CCPC), Brendan Smith, a director of Aston Carpets, was arrested in April 2014.
Charges were brought against both Smith and the company for bid-rigging involving contracts for several “major international companies” between 2012 and 2013.
The projects included fitting out Google’s sprawling base in Dublin’s docklands, formerly known as Montevetro, as well as work at Dell’s Cherrywood campus and contracts with BT, Mastercard and PayPal.
The CCPC found that an agreement was struck up between Aston Carpets and a competitor, Carpet Centre (Contracts), to set prices for several tenders between 2011 and 2013.
The intent of the agreement was to fix the price for the supply and fitting of floor finishes and to share the market between them by over-bidding on alternating tenders.
The competition watchdog found that there had been collusion in 16 contracts, the values of which ranged from €17,000 to €477,000. Both parties pleaded guilty to engaging in an anti-competitive agreement.
Sentence
Smith, who is from Meath, was fined €7,500, while the judge imposed a fine of €10,000 on Aston Carpets, which has a registered address in Mayo.
Separately, Smith was also convicted of impeding a criminal prosecution. Judge Patrick McCarthy imposed a three-month suspended sentence on the businessman in the Central Criminal Court today.
He has also been disqualified from acting as a company director for five years.
The court heard that the investigation was opened after a complaint, and an application had been made under the CCPC’s so-called ‘cartel immunity programme’.
The programme offers protection to a member of a cartel if they are the first to come forward, reveal their involvement in the illegal activity and fully co-operate with an investigation.
Victims
In response to today’s sentencing the CCPC’s chair, Isolde Goggin, said that “this serves as a reminder to those involved in procurement to be vigilant.”
“Cartels are serious criminal offences. They can pose significant damage to the economy.
“Bid-rigging distorts the tender process, potentially excluding legitimate competitors and potentially resulting in artificially high price bids.
“The victims of bid-rigging are customers – in the private sector, hard-working, legitimate businesses, and in public procurement, where the customer is the state, it is the taxpayer who suffers as the winning bid tends to be higher than it should have been.”
Smith was removed as a director of Aston Carpets in April 2015 and the business continues to trade. Mayo businessman Alan Crean, the firm’s founder, and Brian Ruane are listed as its current directors.
