Energy Secretary Ed Davey demanded answers this afternoon from the Office of Fair Trading over its tardy investigation into the Peverel / Cirrus price-fixing scandal.
He and Sir Peter Bottomley, MP for Worthing West, wanted to know why the investigation was so protracted and why Peverel was offered a 100 per cent leniency deal.
Peverel only began co-operating with the OFT after the Times had already outlined how its scam with Cirrus operated on December 4 2009. One of the three Campaign against retirement leasehold exploitation whislteblowers, Susan Wood, has involved Nick Clegg, her MP, in the case.
In a letter to Cavendish Elithorn, senior director, Office of Fair Trading (Goods & Consumer), Wood writes:
“Disappointment turned to outrage when I discovered from your press release that Peverel had successfully gamed the system by claiming leniency because of self-reporting, allegedly before you had received formal notification from either ourselves, or the SFO. Quite apart from the information that was in the public domain, it is clear that Peverel only turned themselves in because they had seen the Times article of 4th/5th December 2009, and realised the game was up. Hardly a crisis of conscience. And the information in the Times had been supplied by one of the Campaign against retirement leasehold exploitation complainants.”
Her full letter is below.
At the meeting this afternoon, Sir Peter Bottomley set out his view that he did not believe that the Cirrus fiddle was cartel, but one with a dominant party calling the tune or perhaps a monopoly.
The OFT set out as per the preliminary findings and press statement that Peverel had reported themselves as being part of a cartel to supply door access systems in the retirement sector through is Cirrus subsidiary.
It is clear from public records that the other three companies in the cartel were very small and the whole purpose to the scam was so that “Cirrus allegedly shared confidential pricing information with each of the other companies with the aim that they would submit higher bids, enabling Cirrus to win the tenders”
The OFT was pushed strongly to consider whether it should bring stronger action which would result in a fine.
While not being able to set out what would be in the final findings, the OFT made clear that it understood one of the functions of its findings was to provide information which those impacted by this practice could use to help obtain compensation.
On a wider issue, Ed Davey set out that he had raised a number of concerns about the lack protection offered in the retirement sector and those concerns remained. The prospect of referring the sector to the competition commissioner was raised.
The full implications of this meeting are yet to be revealed.
But thanks to Campaign against retirement leasehold exploitation a cosey little stitch-up between OFT and Peverel is now receiving the full attention of senior politicians.
The open question is whether this scandal impacts more on Peverel or the pathetic and indolent OFT.
Susan Wood’s full letter to the OFT is below:
To: Cavendish Elithorn
Senior Director – Office of Fair Trading (Goods & Consumer)Dear Mr Elithorn
As you know, I am one of the main three Campaign against retirement leasehold exploitation complainants in your long-standing enquiry into the Peverel group. I have personally spent a huge amount of time assisting your team and providing them with what I believed was information to help them understand the case. I was initially disappointed that the OFT diluted my complaint – which was ‘abuse of a monopolistic position in the marketplace’ – by putting it together with Ken Kilmister’s complaint about Cirrus to the Serious Fraud Office in 2009, and restricting your investigation to the Cirrus bid-rigging only. Disappointment turned to outrage when I discovered from your press release that Peverel had successfully gamed the system by claiming leniency because of self-reporting, allegedly before you had received formal notification from either ourselves, or the SFO. Quite apart from the information that was in the public domain, it is clear that Peverel only turned themselves in because they had seen the Times article of 4th/5th December 2009, and realised the game was up. Hardly a crisis of conscience. And the information in the Times had been supplied by one of the Campaign against retirement leasehold exploitation complainants.
At the meeting in July, you explained the OFT’s leniency rules were designed to tempt the ‘little people’ caught up in price-fixing to blow the whistle on the major players. But in this case, you have allowed Peverel – the perpetrator of the whole thing – to cynically exploit the rules, and get off Scot free, while two of the little companies so essential to the scam have gone into administration. Throughout the case, the OFT pledged us to keep matters confidential, on the grounds that disclosure could prejudice a prosecution. But your team knew all along that our evidence wasn’t needed, because Peverel had already admitted they were running the scam. And they were also seemingly immune from penalties. I feel our time, and that of our pro-bono lawyers, has been wasted.
In fact, our entire dealings with the OFT have proved to be a disappointment. (This extends also to the insipid outcome of your investigation into exit fees.) You have not provided an adequate explanation of why you didn’t start the Cirrus scam investigation until 2011, despite learning of it in December 2009. And at our meeting on 24th July, you promised we would be told “within two weeks” either the precise date Peverel allegedly turned themselves in, or that you were not prepared to tell us. We are still waiting. I am also disgusted you have withheld the non-confidential Statement of Objections on the grounds we didn’t apply for ‘formal complainant’ status. But it didn’t occur even to our very experienced lawyer that this would be necessary. Indeed, the OFT themselves have referred to us as ‘complainants’ all along (see sample email from Yael Shine on 23rd November 2011).
I am still keen to help you in any way with this investigation, so I am asking once more for a copy of the Statement of Objections so I can ‘materially assist you’, as required by your rules. As we have said repeatedly, the Cirrus scam is only the tip of the iceberg of the lucrative exploitation of the elderly indulged in over the years by Peverel & Consensus. We are all doing our best to bring them to book, and make sheltered retirement housing a secure option in all senses of the word for the elderly. Unfortunately, to date the authorities have provided only flimsy support.
Please also note that I am copying this to Nick Clegg, my local MP, who has asked to be kept informed.
Regards
Susan Wood
Related posts:
OFT will report on the Peverel / Cirrus price-fixing scandal on Friday
Campaign against Residential Leasehold Exploitation meets lawyers over Peverel price-fixing scandal
Guardian covers more fall out from Peverel’s price-fixing scam with Cirrus Communications
The Oldie reports Peverel / Cirrus price-fixing scandal
Peverel Cirrus price-fixing stooge says sorry …
