4th Nov 2013 11:43
LONDON (Alliance News) - The UK's Serious Fraud Office Monday said it has opened a criminal investigation into electronic monitoring contracts run by Serco PLC and G4S PLC, the latest in a string of bad news for both companies.
The government in July placed all the criminal tagging contracts held by G4S and Serco 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.
The news that the SFO has now started a criminal investigation comes just a day before G4S gives an investor presentation at which it is expected to come under fire for a string of recent contract issues and pressure to break itself up.
The company had to pay the army to do some of the security for the London Olympics after failing to recruit enough staff to cover the contract, and has recently been suspended from running South African prisons after allegations of abuse at one of the country's most dangerous prisons. It replaced its chief executive last month in an attempt to repair its relationship with the UK government following the tagging allegations.
Serco, meanwhile, has also replaced its chief executive after the UK government 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.
G4S said it would fully cooperate with the SFO investigation.
G4S shares were trading down 1.8% at 250.2 pence in the aftermath of the announcement, while Serco was down 0.4% at 550 pence.
By Steve McGrath; [email protected]; @SteveMcGrath1
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