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Serco pays £19.2mln to draw line under electronic tag scandal

A Serco subsidiary understated how much it was earning from an electronic tag contract with the Ministry of Justice for a period up to 2013

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The outsourcer will also pay the Serious Fraud Office's costs of £3.7mln

Outsourcer Serco PLC (LON:SRP) will pay a fine of £19.2m together with £3.7mln in costs as part of a deferred prosecution agreement for a fraud investigation dating back to 2013.

In one of the most high-profile business scandals of its time, a Serco subsidiary understated how much it was earning from an electronic tag contract with the Ministry of Justice. 

The company paid £70mln in compensation to the Ministry of Justice in 2013, but this latest fine relates to a separate investigation by the Serious Fraud Office.

Serco itself reported the two offences of false accounting and one of fraud, which meant the fine was half what it might have been.

Rupert Soames, Serco Group chief executive, said: "Those of us who now run the business are mortified, embarrassed and angry that, in a period between six and nine years ago, Serco understated the level of profitability of its Electronic Monitoring contract in its reports to the Ministry of Justice. Serco apologised unreservedly at the time, and we do so again."  

“Nobody who sat on the board of Serco Group, or who was part of the executive management team at the time these offences were committed, works for the group today,“ he added.

In early morning trading, shares in Serco were 1% lower at 144.30p.

 -- Adds share price --

 
 

Quick facts: Serco Group

Price: 166.4 GBX

LSE:SRP
Market: LSE
Market Cap: £2.04 billion
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