Serco cleared of fraud – but value plunges

EMBATTLED Government contractor Serco has been cleared of fraud over its contract to escort prisoners to and from court.

City of London Police yesterday closed a year-long investigation into the company after concluding that there was no evidence of ‘corporate-wide conspiracy’.

But shares in the group tanked by 8pc – because most investors had forgotten that the inquiry was even t aking place, and t he announcement was a reminder of the company’s poor reputation.

Serco, 12.8p lower at 153p, was investigated after it admitted in 2013 that i t had l i ed to the Ministry of Justice over whether it delivered prisoners on time – a key performance figure in the £285m contract.

The City of London Police launched an investigation to see if there was evidence of collusion in the deception by managers.

It has subsequently found none, though a probe by the Serious Fraud Office is still ongoing.

Police concluded ‘ there was there was no evidence of any corporate- wide conspiracy or an intention to falsify figures to meet the [prisoner transport] contract requirement by senior Serco management or at board level’.

This means the company can continue doing the work until 2018, when the contract expires.

The admission came soon after it emerged that Serco charged millions of pounds for monitoring the movement of criminals who had died or returned to prison.

The following 18 months saw Serco suspended from fresh government work, a boardroom and management clear- out and the collapse of its share price.

Rupert Soames was drafted in to turn the firm around. He has issued several mammoth profits warnings and announced an intention to hold a £550m rights issue.

Earlier this week Serco delayed a key financial health check by five months, to rebuild its finances.