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De La Rue calls in SFO over banknote production irregularities

08 September 2010  |  10266 views  |  4 Pound note Queen Close up

Banknote manufacturer De La Rue has called in the Serious Fraud Office after establishing that staff "deliberately falsified" paper specification test certificates in a scandal the firm estimates will cost it at least £35 million.

In July the world's biggest banknote printing company suspended production at a Hampshire plant over "quality and production irregularities" and last month CEO James Hussey quit, saying he had to take responsibility for the problem.

In an update that saw its share price fall 22.5 pence to 681 pence yesterday, De la Rue now says "certain paper specification test certificates for a limited number of customers" have been falsified deliberately by some employees.

"Banknote paper specifications have a large number of detailed parameters and the investigation has found in certain cases that a small number of them have fallen marginally short of specification," says the statement.

The SFO has now been brought in to investigate the issue which is expected to hit De La Rue's first half pre-tax profit by at least £35 million

Nicholas Brookes, executive chairman, De La Rue, says: "The behaviour of some of our employees in this matter was totally unacceptable and contravened De La Rue's rigorous standards. We do not tolerate such behaviour and appropriate disciplinary action is being taken."
KeywordsFINDEXLEGAL

Comments: (4)

Keith Appleyard
Keith Appleyard - available for hire - Bromley | 08 September, 2010, 11:37

I find it astonishing that staff would do such things - can it be due to a general dumbing down of skills, lack of apprenticeship or whaetever, that results in employees not understanding the seriousness of their actions?

I had it with programmers who used to be blase about miscalculations of interest charges on credit cards (its OK, when people phone in just say sorry) - until I threatened to miscalculate their wages so they couldn't pay their mortgages (but it was OK, I'd just say sorry).

I find a resurgence in blase attitude from the outtaskers in India.

 

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Lachlan Gunn
Lachlan Gunn - BenAlpin Ltd - Perth | 08 September, 2010, 12:11

Hmmm.  The use of the word 'deliberately' and bringing in the SFO is a clear sign that there may be a lot more to this than careless or negligent staff.  I have seen another quote attributed to Brookes which is below:

‘The company reiterates that it has not found anything to suggest that either the physical security or the security features in the paper have been compromised and that the matters uncovered relate only to the certification of paper specifications at the relevant facility.'

Wonder which country or countries the banknotes in question were for?  Will this make life easier for banknote counterfeiters?  It will interesting to see what the SFO find..............

 

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Matt White
Matt White - Finextra - Toronto | 08 September, 2010, 14:09

Lachlan, De la Rue's not commenting on which countries are affected but India is being touted and the FT says the RBI has already sent a delegation over to the UK to discuss the issue.

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Lachlan Gunn
Lachlan Gunn - BenAlpin Ltd - Perth | 11 September, 2010, 17:12

Thanks Matt....and I've just noted that the FT also mentions that the production problems have affected one client in South America (according to their source).

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