25th Oct 2013 10:50
LONDON (Alliance News) - The chief executive of support service company Serco Group PLC fell on his sword Friday, resigning due to the company's botched deal to run a prisoner transfer contract as the company also moved to strengthen its government contract operations.
The company is undertaking what it describes as a "renewal programme" after the UK government and Serco in August called in police to examine claims of fraudulent misreporting of data on the company's contract to transport prisoners to court in London and East Anglia. The government has threatened to block the company from winning any more government contracts unless it quickly changes and is more open to government scrutiny on any public contract.
"Given the overriding objective of the renewal programme, Christopher Hyman believes that the company will have the greatest chance of success with new leadership at the helm and he has, therefore, decided to step down with immediate effect," the company said in a statement.
"At this time, nothing is more important to me than rebuilding the relationship with our UK government customer," Hyman said. "In recent weeks it has become clear to me that the best way for the Company to move forward is for me to step back."
Ed Casey, the head of the company's Americas unit, has been appointed acting CEO, but Serco said it will look outside the company for a permanent replacement and has already begun a search.
Serco said it had also decided to separate its UK & Europe division into two, with one focused on UK Government contracts, and the other on its other business in the wider public sector.
It said it will strengthen its contract oversight and transparency, establish a board committee to oversee corporate responsibility and ethics and update its code of conduct for employees, backed by training and performance management.
It has started looking for three new non-executive members for its board and a group General Counsel.
"The decisive and comprehensive actions we have set out today, alongside the programme already underway, should leave no-one in any doubt about how seriously Serco takes these issues and our commitment to rebuild the confidence of our UK Government customer," Chairman Alastair Lyons said.
Serco said reviews and audits of all its government contracts are progressing satisfactorily and it still expects them to conclude in the autumn.
Serco shares were up 2.8% at 568 pence Friday morning, one of the biggest gainers on the FTSE 250.
By Steve McGrath; [email protected]; @stevemcgrath1
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