De La Rue PLC (LSE:DLAR) said it has been implicated in an investigation in India into the activities of Arvind Mayaram, the country’s former Finance Secretary.
The banknote printer said it had not served the Government of India or the Central Bank of India in any capacity since 2016, adding that it believes that there is no merit to the allegations and it is seeking legal advice in this regard.
The company noted that while it has not received any formal notification it understands from publicly available sources that the investigation relates to activities prior to 2016.
Elsewhere, De La Rue said it had also lost an appeal in Kenya for a £7.2mln tax rebate. Expressing disappointment with the outcome, the company said it is preparing another appeal and was also suspending banking printing in Kenya due to no prospect of new orders for at least twelve months.
Going forward, De La Rue will operate three banknote sites in the UK, Malta, and Sri Lanka.
“The suspension of activities at De La Rue Kenya does not affect the previous guidance provided related to current year financial performance,” the company said in a statement.
In November, De La Rue posted an operating loss of £12.6mln, a reversal from a profit of £13.8mln last time out, reflecting exceptional charges of £21.4mln.
For the full year to end-March 2023, adjusted operating profit is expected to be £30mln-£33mln, versus analyst estimates of around £36mln.