19th Nov 2013 11:34
LONDON (Alliance News) - Outsourcing company G4S PLC Tuesday said that the law firm it hired to conduct an internal review of its criminal tagging contract hadn't found any indications that its employees broke the law, but had confirmed that it had occasionally wrongly billed the UK government.
The government in July placed all the criminal tagging contracts held by G4S and Serco PLC under review after an audit showed they had been over-charging, claiming for people who were dead, who had never been to prison, or never tagged in the first place. Earlier this month, the Serious Fraud Office opened a criminal investigation into the contracts.
In a statement, G4S said law firm Linklaters had "conducted an extensive search and review of emails and numerous interviews with relevant employees and has not identified any evidence of dishonesty or criminal conduct by any employee of G4S in relation to the billing arrangements under the EM contracts."
However, it said the review had confirmed that sometimes, the G4S unit responsible for the contract had wrongly though it was allowed under the contract to charge for monitoring services when equipment had not been fitted or after it had been removed.
"This billing practice, which the company believes was confined to the EM contract for England and Wales, was not consistent with the contract or G4S' values and the company has apologised to the Ministry of Justice and issued credit notes totalling GBP23.3 million for amounts incorrectly billed between 2005 and May 2013," it said.
It said it will also pay back a further GBP0.8 million for billings made from June this year to date.
Those paybacks are covered by an impairment the charge the company had already announced, but G4S said it has incurred an additional investigation cost of GBP2 million.
G4S last month replaced its chief executive as part of an attempt to repair its relationship with the UK government following the tagging allegations.
"The way in which this contract was managed was not consistent with our values or our approach to dealing with customers. Simply put, it was unacceptable and we have apologised to the Ministry of Justice. As part of a wider programme of corporate renewal, we have changed the leadership of our UK business and we are putting in place enhanced risk management and contract controls," new Chief Executive Ashley Almanza said in a statement.
The company said it is continuing to cooperate with the Ministry of Justice review of the contracts and the Linklaters internal review is also ongoing.
G4S shares were down 0.3% at 256.10 pence Tuesday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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