De La Rue chief quits over paper production problems

De La Rue chief quits over paper production problems

Shares in British bank note printer De La Rue plunged more than 13% in morning trading after the firm's CEO quit over "quality and production irregularities" at a paper production plant.

Last month the company suspended production at the Hampshire facility, warning that "it is now expected that paper production and sales in 2010/11 will be materially lower than originally planned".

It now says the problem is of "a serious nature" and an announcement on the financial and operational implications will be made at a later stage but warns that "owing to the complexity of the issues, this is unlikely to be in the near future".

James Hussey, who was appointed chief executive of the world's biggest commercial security printer and papermaker last January after a 25 year career at the firm, has resigned because of "his belief that he must take responsibility for this".

Non-executive chairman Nicholas Brookes has been appointed executive chairman and group finance director Colin Child has taken on the additional role of COO while a new CEO is found.

The company is "confident that neither the physical security nor the security features incorporated in the paper have been compromised for any customer and that the irregularities referred to above relate only to testing of paper specifications at the relevant facility".

By 2.28pm the firm's share price had recovered slightly to 726.5 pence per share, still down 8.6% on yesterday's close.

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