UK regulators raid Mitie London offices - report

UK competition investigators have raided the offices of outsourcer Mitie and are examining the emails of senior staff, after the Home Office raised concerns about suspected anti-competitive behaviour, according to media reports on Wednesday.

The Competition and Markets Authority (CMA) is examining the relationship between Mitie and US firm PAE, who operate a joint venture for the Ministry of Defence but were also competing to run Home Office immigration removal centres, at Derwentside, in County Durham, and Heathrow airport.

Mitie’s shares fell more than 10% earlier this month after it told investors the CMA was investigating the competition process.

The firm at the time blamed Home Office bidding rules for its withdrawal from the bidding for the Derwentside contract.

However, a source told the Guardian newspaper that investigators were focusing more on a separate competition between Mitie and PAE for the Heathrow centre.

Both companies were bidding on the immigration contract until PAE pulled out last year, leaving the way clear for Mitie. The Home Office subsequently referred both companies to the CMA, the Guardian said.

The CMA, which is investigating whether breaches of competition law took place, is now thought to be looking into the wider working relationship between the companies.

Mitie and PAE are partners on a separate joint venture called Landmarc, managing firing ranges, training and explosives handling facilities for the Ministry of Defence.

Landmarc is one of five companies providing the services to the MoD, as part of a £1.5bn framework agreement, which will be up for renewal in March 2024.

CMA officials are understood to have raided Mitie’s offices, on the 12th floor of London’s iconic Shard skyscraper, earlier this month. They seized documents and are understood to be reviewing emails, including those sent by senior staff.

The newspaper said it understood that the CMA has not so far made a request to interview the Mitie chief executive, Phil Bentley.

A spokesperson for Mitie referred the Guardian to its statement to the stock market, in which the company said it had “no case to answer” and expected to be “fully exonerated”.

“Mitie strongly condemns anti-competitive practices and is co-operating fully with the CMA and the investigation,” the company said in its statement.

PAE said on Tuesday that it believed the CMA’s investigation was “unfounded” but said it was fully complying with the regulator. “Not all of what you propose to say is factually accurate,” it added.

A Home Office spokesperson declined to comment on whether the department had itself referred the two companies to the CMA.

London-headquartered Mitie is a major contractor to both the government and the private sector, running facilities such as cleaning, security and waste management.

Its latest annual report for 2021 shows that it derived £1.1bn, about 42% of its revenue, from its work for local and central governments.