28th Sep 2021 09:20
(Alliance News) - The UK government will seize control of the Southeastern rail franchise after the operator was found to have not declared more than GBP25 million of historic taxpayer funding.
The Department for Transport have appointed the so-call 'operator of last resort' to take over the running of the service from October 18, after a "serious breach" of its franchise agreement
Go-Ahead Group PLC, which owns operator London & Southeastern Railway alongside Keolis UK, said it regretted the decision, while acknowledging "errors".
UK Transport Secretary Grant Shapps said an investigation by his department identified evidence that since October 2014 the company has failed to declare more than GBP25 million of historic taxpayer funding which should have been returned. Further investigations are being conducted and the government said it will consider options for more action, including financial penalties.
Go-Ahead said it had repaid the GBP25 million referred to in the government's statement and that it would provide a "detailed update on further liabilities in its full-year results".
Go-Ahead also said Elodie Brian has resigned as chief financial officer, effective immediately. A search has begun for her successor, while Gordon Boyd has been appointed in the interim. Go-Ahead noted that Boyd has held senior finance positions with power generator Drax Group PLC and with outsourcer Capita PLC.
Shares plummeted 18% to 843.07 pence each in London following the announcement on Tuesday morning.
The publishing of the group's financial year 2021 results, previously scheduled for September 30, has been postponed. Financial results, including any expected provisions but excluding potential financial penalties, remain in line with expectations, Go-Ahead noted.
"We recognise that mistakes have been made and we sincerely apologise to the DfT. We are working constructively with the DfT towards a settlement of this matter," said Chair Clare Hollingsworth.
By Will Paige; [email protected]
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