Staff made false records at Hampshire banknote printer, De La Rue (From Daily Echo)

Staff made false records at Hampshire banknote printer, De La Rue

5:30pm Tuesday 7th September 2010 in

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HAMPSHIRE banknote printer De La Rue has called in the Serious Fraud Office (SFO) after an internal investigation into a production crisis.

The company claims a number of employees “deliberately falsified” paper specification test certificates for some customers after launching an inquiry into failures at its UK factory in Overton, near Basingstoke.

De La Rue, which prints notes for the Bank of England and 150 other countries, said paper specifications have a large number of detailed parameters and the investigation, which is ongoing, found in certain cases a small number of them fell “marginally short of specification”.

The firm has passed its findings on to the SFO and said it was taking disciplinary action against those involved.

Yesterday bosses issued a hefty profits warning, sending shares tumbling 3.2 per cent to their lowest level in five years. They have fallen by one third this year, valuing the firm at £674m.

De La Rue warned its production woes would cost it at least £35m in lost profits for the half year to the end of September as sales volumes were also affected.

It said it was too early to determine the impact on future results as it holds talks with legal authorities and customers, including the Reserve Bank of India, which said it had sent a delegation to De La Rue.

Chief executive James Hussey has already resigned over the issue which forced De La Rue to temporarily halt production at Overton in July. A new managing director has been brought in for the currency division.

The group insists that despite the production failures, neither the physical security nor the security features in the paper were compromised.

It stressed production had been brought up to scratch and that the group was now ready to resume supply of fully compliant paper.

Nicholas Brookes, chairman of De La Rue, said: “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.”

An SFO spokesman said: “We have got an open file and it is not a certainty that an investigation will accrue. We will remain in contact with De La Rue to establish if there needs to be a formal investigation.”