29th Mar 2018 15:17
Shares in Arena Events were down 20% at
The US Attorney's Office has formally charged one of Arena America's previous customers for a violation related to the Small Business set-aside program.
"This customer won certain contracts from the US Department of Defence between 2007 and 2017 that were designed to support the development of small businesses and subsequently engaged Arena Americas, amongst other sub-contractors, to supply product and labour for the delivery of these contracts," Arena Events said.
As a result, the department has now launched an investigation into unnamed customer's relationship with Arena Americas. The subsidiary is engaging with probe in order to resolve the matter.
The total revenue from contracts entered into with the customer, since the acquisition of Arena Americas in 2013, amounts to around
This revenue is less than 2% of the total revenue generated by Arena Americas in the same period.
"The board is unable to predict the outcome of this investigation, and therefore the level of any potential fines imposed or settlement that may be negotiated by Arena Americas," Arena Events said.
With the information available to date, Arena Events said, the Attorney's Office could seek to claim damages in the range of "two times profits to two times revenues", implying a range of between
In addition, Arena Event said it has had a strong start to trading in 2018.
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