Grenfell cladding company hit with lawsuit after its shares collapse
THE company which supplied the cladding at Grenfell Tower is facing legal action from shareholders who have suffered huge losses.
Shareholder Michael Brave has filed a lawsuit in New York accusing Arconic Inc of defrauding investors by a failure to properly disclose its use of ‘highly flammable’ panels.
Around 80 people died last month after a raging fire spread through the tower block in North Kensington, West London.
Attention has been focused on the flammable cladding panels on the high-rise block which caught light and spread the flames rapidly. Similar panels are being taken down from tower blocks across the country after failing fire safety tests.
An investigation by Channel 4 News has also raised questions about recent refurbishment work on the Grenfell building.
Evidence has emerged that smoke and fire may have spread via an air gap between newly installed windows and the building’s original walls.
Channel 4 said detailed planning drawings showed an air gap that may have enhanced the spread of fire. One resident photographed smoke ‘ coming through the side of the windows’, which he said was ‘very scary’.
In his proposed class-action Mr Brave is seeking to recoup ‘significant losses’ caused by the drop in Arconic’s share price in the wake of the tragedy.
The price fell by 21 per cent between June 14 – the day of the fire – and June 27, although it has since recovered slightly.
This drop reduced Pennsylvania- based Arconic’s market value by around £1.9billion. Mr Brave also named chief financial officer Kenneth Giacobbe and former chief executive Klaus Kleinfeld as defendants.
Other shareholders may now join the action to sue as a group. Mr Brave said shareholders were deceived by Arconic’s inadequate disclosures about the cladding panels, and that their use significantly increased the risk of property damage, injury or death in buildings containing them.
He said Arconic’s public statements were ‘materially false and misleading at all relevant times’. Arconic has stopped selling the Reynobond PE cladding for use in high rise buildings anywhere in the world.
An earlier company statement said: ‘Current regulations within the US, Europe and the UK permit the use of aluminum composite material in various architectural applications, including in high-rise buildings depending on the cladding system and overall building design.
‘Our product is one component in the overall cladding system; we don’t control the overall system or its compliance.’
Officials have begun preparations for a major review of building regulations in England, the BBC’s Newsnight programme has claimed.
It is not clear when a government review will be announced, but it is likely that it will be complicated by the ongoing police investigations and the public inquiry into the tragedy.
Metropolitan Police Commissioner Cressida Dick yesterday defended her officers following criticism about delays in establishing the final death toll.
She told LBC radio that specialists are working through every floor and every flat ‘on their hands and knees, sifting every single bit of material they can find’, to see if they can discover any more traces or remains of people. ‘We are really working on this as hard as we possibly can,’ she added.
‘Significant losses’