SFO investigates De La Rue over South Sudan ‘corruption’ claims
DE LA RUE is being investigated by the Serious Fraud Office (SFO) over “suspected corruption” in Africa as the embattled printer’s bad news continues.
Shares fell as much as 15pc yesterday after it was revealed a probe has been opened into the banknote business and “its associated persons in relation to suspected corruption in the conduct of business in South Sudan”.
De La Rue said it would co-operate with the SFO, adding because of the “early stage” of the investigation it is “not possible to predict reliably what effect their outcome may have”. It declined to give more details. SFO investigators urged whistleblowers to get in touch, via its secure reporting portal.
De La Rue trumpeted its success in winning the contract to print banknotes for South Sudan in 2011, the year that it seceded from the Republic of the Sudan.
The company said it spent six months producing a new currency for the world’s newest country.
However, three years ago South Sudan media reported allegations of corruption among government ministers and officials linked to the bank – claims dismissed by its then finance minister.
The investigation is the latest trouble for De La Rue. One of its largest shareholders, activist investor Crystal Amber, wants chairman Philip Roger- son to step down immediately, saying De La Rue has had massive value destruction under his seven-year watch.
Shares have near-halved in the past year, after profits plunged and a further warning at the annual results in May. Chief executive Martin Sutherland said he would go when a successor is found.
He was at the helm last year when De La Rue lost the £400m contract for UK passports – and threatened to sue the Government over the awarding of the 10-year deal to French-dutch firm Gemalto, before quickly backing down.
Mr Rogerson said he will go once a new chief executive is found but Crystal Amber wants him to quit immediately and is threatening to call a special meeting to vote on ousting him. The investor, which has a 6.3pc stake, also hit out at what it calls strategic blunders and failures to engage with potential partners – denied by De La Rue.
Fund manager Richard Bernstein has also criticised bosses’ bonuses at the printer, and the firm faces the prospect of a rebellion at its annual meeting tomorrow.
Shareholder adviser ISS wants investors to vote against De La Rue’s remuneration report because of worries about bonuses awarded despite the firm’s poor performance.
Concerns about remuneration include Mr Sutherland’s total pay, which rose more than 20pc to £954,000 for the year, including a £197,000 bonus that Crystal Amber wants repaid.
ISS said: “Bonuses have been paid out despite a decline in financial and share price performance.
“It is questionable whether any bonus is appropriate given this backdrop … especially in the case of the chief executive, whose departure was announced concurrently with the [fullyear results].” The Investment Association has issued an “amber top” warning” about the company, with concerns over pension payments to Mr Sutherland.
The £132,000 the chairman is in line for is equal to 30pc of his salary, a level that the association says is outsized compared with most workers.
Mr Bernstein said: “The South Sudan news is just another body blow for management at De La Rue.”
He added that while few details are known about the SFO probe, “management needs to take responsibility. All bonuses should be repaid.”