G4S chief executive Nick Buckles faced anger from MPs yesterday as he admitted his handling of the Olympic security fiasco was a “humiliating shambles”, but said the firm would not give up its £57m management fee from the contract.
Buckles told the home affairs select committee he was “deeply sorry” and that he regretted signing the £284m deal to provide 10,400 guards for the Games.
G4S may have to spend £50m on paying around 3,500 soldiers because the company cannot provide enough security staff.
Labour MP Keith Vaz, the committee’s chairman, called G4S’s handling of the affair “unacceptable, incompetent and amateurish” and said it was “astonishing” that Buckles intends to keep its management fee.
Shares in G4S fell a further six per cent to their lowest level since last November yesterday, although the company’s second-biggest shareholder Invesco mounted a staunch defence of Buckles.
“The interests of shareholders are best served by keeping Nick Buckles in this business because his track record is excellent,” Neil Woodford, Invesco’s investment manager, said yesterday.
Buckles said he was “deeply sorry” for the affair but felt he was the “right person at the moment” to “deliver as many people as we can”.
He said the security company hoped to have 7,000 guards in place at the start of the Games, but could not guarantee it.
Buckles admitted the damage was more reputational than financial, and that G4S will now no longer be bidding for security contracts at the next Olympics or the 2014 World Cup, both of which will be held in Brazil.
Panmure Gordon analyst Mike Allen told City A.M. that it is “difficult to see them doing major events on this scale again” following the fiasco.