De La Rue staff faked banknote quality tests

Reputation of 200-year-old firm at risk as inquiry findings are handed to fraud office

The troubled banknote producer De La Rue confirmed yesterday that a number of its employees had falsified paper quality reports for some of its 150 clients, and that the findings of the investigation have been passed on to the Serious Fraud Office (SFO).

The 200-year-old firm said that an initial inquiry had uncovered evidence that a "limited number" of employees had "deliberately falsified certain paper specification test certificates for a limited number of customers". De La Rue did not give details, adding that the investigation was ongoing.

Any questions over the probity of De La Rue's work are likely to hit its reputation as a trusted partner of a number of governments around the world that depend on the company to help anti-forgery measures.

In a statement yesterday, De La Rue's executive chairman, Nicholas Brookes, 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."

Mr Brookes took over executive control of the company last month when the former chief executive James Hussey – the son of the former BBC chairman Marmaduke Hussey – resigned after the quality problems came light. He had worked for the company for his entire 25-year career.

It is understood that as part of the investigation, there have been two other resignations at the company: the managing director of its currency business, whom the group declined to name yesterday, and a more junior official. Since the three departures, Keith Brown has been given the job of heading the currency unit. The finance director, Simon Webb, also stepped down in May.

The problems are thought to be related to the company's printing and shipping facilities in Hampshire, while reports, which the company has not confirmed, suggest that the banknote paper in question had been designated for the Reserve Bank of India. De La Rue's contract with the central bank accounts for up to a quarter of its profits.

De La Rue said yesterday that the crisis was estimated to cost the company £35m of profits in the first half of its financial year, adding that it was impossible to say what the final effect on the balance sheet would be. The group's shares fell by 3.2 per cent, to 681p, making it one of the worst performers on the FTSE 250.

"The only good news here is that at least we have some clarification on exactly what has been going on," Paul Jones at Panmure Gordon said. "But the details do show that there is some seriously bad news. When the problems were disclosed in July, I downgraded by £12m in the half year, and I thought at the time that that might have been a bit harsh. Now it seems that it is much worse than that. But the major problem is that this is a company that has built its reputation over many years, and now faces customers who will want to check absolutely everything. Whichever way you look at this situation, it is not good."

Despite the last few weeks being among the worst in the company's long history, the SFO praised its actions yesterday. "We're not launching a full inquiry at this stage," a spokesman said. "The company reported this situation to us, and good for them for doing so. We are monitoring it closely. At this stage the inquiry is still ongoing, but they have shared the early results with us."

Banknotes, and the paper they are printed on, are designed to very detailed specifications, largely to prevent forgery. De La Rue has long lauded its record and the number of countries that have long relied on its services.

The company's shares have lost about a quarter of their value in the last three months as the details of the quality problems have dripped out.

PROMOTED VIDEO
Extras
indybest
Travel
Flocking round: Beyoncé, Madame Tussauds' latest waxwork, looking fierce in the park
travelIn a digital age when we have more access than ever to the stars, why are waxworks still pulling in crowds?
Arts and Entertainment
tv
Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Sport
Is this how Mario Balotelli will cruise into Liverpool?
football
News
Ronahi Serhat, a PKK fighter, in the Qandil Mountains in Iraqi Kurdistan
i100
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Poet’s corner: Philip Larkin at the venetian window of his home in 1958
booksOr caring, playful man who lived for others? A new book has the answer
Arts and Entertainment
Exhibition at the Centre Pompidou in Metz - 23 May 2012
art
News
Matthew McConaughey and his son Levi at the game between the Boston Red Sox and the Houston Astros at Fenway Park on August 17, 2014 in Boston, Massachusetts.
advertisingOscar-winner’s Lincoln deal is latest in a lucrative ad production line
Life and Style
Pick of the bunch: Sudi Pigott puts together roasted tomatoes with peppers, aubergines and Labneh cheese for a tomato-inspired vegetarian main dish
food + drink
Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'
film
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Junior Quant Analyst - C++, Boost, Data Mining

£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...

Service Desk Analyst- (Desktop Support, Help desk)

£25000 - £35000 per annum: Harrington Starr: Service Desk Analyst- (Desktop Su...

Junior Quant Analyst (Machine Learning, SQL, Brokerage)

£30000 - £50000 per annum: Harrington Starr: Junior Quant Analyst (Machine Lea...

UNIX Application Support Analyst- Support, UNIX, London

£45000 - £55000 per annum: Harrington Starr: UNIX Application Support Analyst-...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape