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Fraud case collapses

Lack of evidence rules out prosecution over alleged bid-rigging in Nottingham

FRAUD police have abandoned an investigation into allegations of contractual irregularities during the award of construction work at the Queen's Medical Centre in Nottingham due to lack of evidence.

The Serious Fraud Office raided two residential and two business premises in Nottinghamshire and Derbyshire last summer, taking computers and paperwork. It was helped by officers from Leicestershire, Nottinghamshire and South Yorkshire Police.

Two people were arrested under caution and later released without charge.

A spokesman for the SFO said: 'The case has been closed.

We unde r took an inves t iga t ion on the basis of the information obtained from the Office of Fair Trading but there was not enough to proceed with a criminal prosecution.' The fraud squad was tipped off by the OFT, which last July raided 22 firms across the East Midlands in one of the biggest ever probes into collusive tendering in the region.

A whistleblower had alleged widespread bid-rigging on construction and renovation contracts on public and private projects in Nottinghamshire.

Information the OFT uncovered sparked its investigation in November 2004.

The OFT investigation into contracts awarded between 2000 and 2005 is still ongoing. It has not ruled out using its criminal powers under the Enterprise Act, which was passed to give the authorities greater powers to break up socalled 'hardcore' cartels.

If a company is found to be part of a cartel it can be fined up to 10 per cent of turnover and its directors can be sent to pr ison for up to f ive years.

Construction is being targeted by the OFT as a priority area of investigation and it has vowed to crack down on anti-competitive practices on projects paid for with taxpayers' money.

Last year it announced that construction would be under the spotlight in its first ever annual business plan, which it has since extended for a further 12 months until April 2007.