Serco shares hit by fraud claims as probe looms

 
Michael Bow
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SERCO had its worst trading day in 11 years yesterday after allegations it fudged performance figures on a £285m contract to deliver prisoners to courts across London.

The Hampshire based business, which was awarded the contract by the Ministry of Justice (MoJ) in 2011, has been placed on a three month probation to improve or face a ban on bidding for future government contracts.

Around half of Serco’s revenues come from the UK government and any ban on future bids could curtail future business.

City of London Police are also due to launch a fraud probe within days into the allegations, further undermining confidence in the firm. Shares in the company, listed on the FTSE 100, tumbled more than 11 per cent. Top shareholders contacted by City A.M. declined to comment on the issue.

The allegation involves data recording the time it takes Serco to prepare prisoners to appear in courts across London and the east of England.

When a prisoner arrives at courts like the Old Bailey or Royal Courts of Justice they must go through a lengthy administrative process before they can receive a legal visit.

Serco’s performance is measured on how quickly they process a prisoner and the police will want to know if the misreporting constitutes a criminal offence. Serco boss Chris Hyman said he was “saddened and appalled” by the misreporting.

“We have not seen evidence of systemic malpractice up to board level,” justice minister Chris Grayling said.