De La Rue investigated by SFO

De La Rue are under investigation

For the second time in three years, the Serious Fraud Office (SFO) has been called to action following allegations of corruption by the company's employees.

De La Rue, the world's biggest bank note printer, confirmed some of its employees had "deliberately falsified certain paper specification test certificates" and added that production errors would cost the company at least £35 million.

"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 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. The Board has put an immediate end to the irregularities that have been identified, " said Nicholas Brookes, chairman of De La Rue.

Previous investigations

De La Rue was also investigated in 2007. The investigation took two years and resulted in no prosecutions.

Paul Jones an analyst with broker Panmure Gordon, said: "De La Rue has had that kind of history. It had a real reputation for shooting itself in the foot in the '90s. [Former chief executive] Leo Quinn polished things up very nicely and put the house in order. It looks like the house needs tidying again now.

"This update is much worse financially than we expected by some margin and serious in its implications for a business where reputation is paramount."

De La Rue confirmed the glitches would cost an initial £35 million in first-half pre-tax profits. Shares dropped to 681 pence, the lowest in over three years.

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