Serco warns of string of corporate scandals sending shares plummeting

Shares in goliath outsourcing firm Serco plummeted by 12% yesterday after the company warned that a string of corporate scandals would damage profits over the next two years.

The company, which provides a host of large and small scale public services, including the Boris bike scheme, the Docklands Light Railway, the Atomic Weapons Establishment, and security services, issued two profit warnings and said it had put £27m aside to deal with external adviser costs, after becoming embroiled in allegations of fraud and mis-selling.

Serco said it had been hit by contract delays after “our relationship with UK government has been impacted by the issues arising on certain contracts with the Ministry of Justice.” 

The Serious Fraud Office is investigating the company after MPs accused the firm of overcharging taxpayers for monitoring the security tags of offenders, many of whom were dead, non-existent, or in custody.

Shares fell 62.9p to 441.1p.

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