Sweett Group is not so sweet after all

Sweett Group shares have taken a hammering this morning, tumbling by almost 30pc.

This is because the company, one of Britain's oldest quantity surveyors, said it has discovered evidence that suggests "material instances of deception may have been perpetrated by a former employee or employees of the group during the period of 2009 - 2011".

As a result, Sweett Group has commissioned a further independent investigation by lawyers from Mayer Brown LLP.

Loyal Betaville readers will remember I wrote a piece about Sweett Group in early February on how rival WSP had been sniffing around the Aim-listed business with a view to buying the company.

At the time, excellent sources told me talks between WSP, which was advised by Barclays on the deal, and Sweett Group's board were quite advanced until they broke down in mid-January. Here is a link to my original piece: http://betaville123.blogspot.co.uk/2014/02/predator-circles-sweett-group.html

My understanding is that talks between Sweett Group and WSP broke down around the time of the announcement on January 8 about the "conclusion of an independent investigation" into allegations that first appeared in the venerable Wall Street Journal last Summer.

Here is a link to Sweett Group's announcement on January 8 -
http://www.investegate.co.uk/sweett-group--csg-/rns/conclusion-of-independent-investigation/201401080700061247X/.

Also, here is a link to the original piece from the Wall Street Journal - http://online.wsj.com/news/articles/SB10001424127887323300004578557190292596654

However, today Sweett Group said that following its "conclusion of an independent investigation" on January 8, there "have been further discussions with the Serious Fraud Office in the UK and initial discussions with the Department of Justice in the USA".

Sweett Group added: "The group is cooperating with both bodies and no proceedings have so far been issued by either of them [The SFO and DOJ]".

So, I suspect we won't see WSP returning to the table with a fresh offer for Sweett Group until this mess has been sorted out!

Canada-based WSP and Sweett Group both declined to comment.