London Grenfell Tower blaze: Cladding supplier sued in US

Insulation was not certified for use with flammable cladding. Certificate for Celotex insulation in tower block said it should only be used with non-combustible cladding

BE2C2 Report — A shareholder of Arconic Inc on Thursday filed a lawsuit accusing the company of defrauding shareholders over its supply of cladding panels used at Grenfell Tower, the London high-rise where at least 80 people died in a fire last month, report Reuters.

Burnt cladding on the outside of Grenfell Tower, north Kensington, London, after the fire on 14 June 2017.

In his proposed class-action complaint, Michael Brave is seeking to recoup “significant” shareholder losses stemming from Arconic’s failure prior to the June 14 blaze to properly disclose its use of “highly flammable” Reynobond PE panels.

The shareholder lawsuit filed in the federal court in Manhattan, where Arconic is based, may be the first in the United States tied to the fire that gutted the 24-story Grenfell Tower, in London’s North Kensington section.

Arconic’s share price fell 21 percent between June 14 and June 27, the day after the company once known as Alcoa said it would stop selling the panels for use in high-rises.

That decline reduced Arconic’s market value by more than $2.5 billion, according to Reuters data.

Arconic declined to comment on the lawsuit. Brave also named former Chief Executive Klaus Kleinfeld and current Chief Financial Officer Kenneth Giacobbe as defendant. The complaint seeks to allow Arconic shareholders from Feb. 28 to June 26 to sue as a group.

Brave said shareholders were deceived by Arconic’s inadequate disclosures regarding 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,” and that Kleinfeld and Giacobbe should also be held liable for their contents.

It is common for shareholders to sue companies in the United States over unexpected stock price declines that they believe could have been averted.

Building safety experts warned in 2014 that the insulation planned for use on Grenfell Tower – which was installed and which fuelled the fatal fire in June – should be used only with non-combustible cladding.

The Guardian has seen a formal certificate issued by the building inspectors’ organisation, Local Authority Building Control, stating that the insulation chosen for the £10m tower refit was acceptable for use on tall buildings only if used with fibre cement panels, which do not burn..

But on Grenfell Tower, combustible polyethylene filled panels were installed on top of synthetic insulation. The insulation, known as Celotex RS5000, was made from polyisocyanurate, which burns when exposed to heat and gives off toxic cyanide fumes.

It has also emerged that a second combustible insulation material was used. Kingspan said one of its products was used “as part of a combination for which it was not designed and which Kingspan would never recommend”.

It said the material, a phenolic insulation called Kooltherm, had never been tested with polyethylene core aluminium panels and that the company “would be very surprised if such a system … would ever pass the appropriate British Standard 8414 large-scale test”. According to Kooltherm’s LABC certificate, phenolic products “do not meet the limited combustibility requirements” of building regulations guidance.

Police have said they are investigating possible manslaughter as well as any “breaches of legislation and regulations”. Detectives are examining how the fire started and the speed of its spread, looking in particular at the cladding and insulation.

Since the fire, the Celotex insulation and the Reynobond PE aluminium cladding have been withdrawn from sale. Both products, which were used on Grenfell Tower, were considerably cheaper than the non-combustible alternatives, according to industry sources.

Celotex is said to be 30% to 50% cheaper than non-combustible mineral fiber insulation. Non-combustible cement-based cladding of the type used in the fire test with Celotex is described as about twice the price of the polyethylene-filled Reynobond aluminium panels that were eventually used on Grenfell.

Cost pressures on the Grenfell refurbishment appear to have been intense. It emerged last month that the project team specified a cheaper cladding, saving £293,368, after the Kensington and Chelsea Tenant Management Organization suggested in an email the need for “good costs for Cllr Fielding Mellen [the council’s former deputy leader]”.

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