UK passport and banknote maker De La Rue caught in corruption probe

Edmund Heaphy
·Finance and news reporter
Updated
LONDON, UK, UNITED KINGDOM - 2019/03/07: British Passports are seen as according to consumer group Which over three millions British travellers could be banned from entering several European countries unless they renew their passports by Friday,8 March 2019 in the event of a no-deal Brexit. (Photo by Dinendra Haria/SOPA Images/LightRocket via Getty Images)
De La Rue said it was being investigated on Tuesday. Photo: Dinendra Haria/SOPA Images/LightRocket via Getty Images

De La Rue (DLAR.L), which last year lost the contract to print UK passports, said on Tuesday that the Serious Fraud Office had opened an investigation into “suspected corruption” relating to its business in South Sudan.

Shares in the UK-based banknote manufacturer, which designed the new South Sudanese currency in 2011, posted losses of almost 16% following an update to investors that declared the investigation.

“The UK Serious Fraud Office has informed De La Rue that it has opened an investigation into the De La Rue group and its associated persons in relation to suspected corruption in the conduct of business in South Sudan,” the company said.

De La Rue has been at the centre of several probes by the Serious Fraud Office, including a 2010 investigation into the falsification of banknote quality certificates by employees.

In 2011, it spent six months designing and manufacturing the currency for South Sudan, which was then the newest country in the world.

Shares in De La Rue closed nearly 16% down on Tuesday. Chart: Yahoo Finance
Shares in De La Rue closed nearly 16% down on Tuesday. Chart: Yahoo Finance

In March 2018, the UK government chose not to renew its contract with De La Rue to print British passports, prompting a fiery response from the company.

French-Dutch competitor Gemalto was picked for the 10-year, £490m contract, and the government later confirmed that it would also manufacture the post-Brexit blue passports.

In May 2019, chief executive Martin Sutherland announced that he was stepping down as De La Rue reported a 77% drop in pre-tax profits and warned that competition would see it post “somewhat lower” profits in the coming financial year.

Sutherland had demanded that prime minister Theresa May visit his factory to explain why she thought it was a “sensible decision to offshore” the manufacturing of the British passport.

After pledging to appeal the awarding of the contract to Gemalto, Sutherland said a month later that De La Rue had taken legal advice and made the “pragmatic business decision” not to contest the UK government decision.