Bank of India chooses De La Rue's replacements

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The Independent Online

FTSE 250 papermaker De La Rue is expected formally to lose its biggest customer, the Reserve Bank of India, as the bank unveils a new raft of banknote producers.

Shares in the 190-year-old British group slumped last year after it revealed production issues with one of its sets of bank notes, which later turned out to be staff faking quality-control test results. Although De La Rue respected client confidentiality at the time, the group confirmed that this was in India later in the year.

It also emerged that De La Rue – the world's biggest banknote designer and producer, with more than 150 currencies – was to be excluded from the latest round of Indian contracts.

Sources suggested that Germany's Giesecke & Devrient, Fortress Paper of Canada, and France's Arjowiggins were favourites to split the contract.

Following the scandal, France's Oberthur Technologies tried to buy De La Rue. However, a revamped management team led by chief executive Tim Cobbold fought off the bid.

Oberthur has been widely rumoured to be considering a second tilt later this year, though it is understood also to have drawn up a shortlist of new targets.

De La Rue declined to comment.