De la Rue fraud probe launched over 'deliberately falsified' banknote tests

Russell Lynch
7 Sep 2010

Banknote printing firm De La Rue today said it had called in the Serious Fraud Office and braced investors for a £35 million profits blow after “totally unacceptable” behaviour by some employees.

The company - which prints 150 national currencies - said some staff had “deliberately falsified” some test certificates on banknote paper for a limited number of customers at its Overton site in Hampshire.

Banknote paper must pass several tests in areas such as durability and heat resistance and the company's probe has uncovered some falling “marginally short” of requirements. Nobody has been charged so far.

The crisis at the firm has already forced the resignation of chief executive James Hussey, who quit last month over the “quality and production irregularities”, which first emerged in July. Shares - down 5% to 670.5p today - have plunged almost 30% since then.

The revelations are likely to wipe more than a third off De La Rue's expected pre-tax profits of £95 million for the full year to March 31, excluding proceeds from the sale of its stake in national lottery operator Camelot.

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.”

De La Rue said it stopped shipment of any affected banknote paper as soon as it became aware of the problems. Mr Brookes added: “The company remains confident that neither the physical security nor the security features in the paper have been compromised.

“We are carrying out a very thorough investigation and are keeping our customers and the legal authorities fully informed.”