# Serco Group plc Investigation by SFO concludes with a DPA

- Link: https://www.directorstalkinterviews.com/serco-group-plc-investigation-by-sfo-concludes-with-a-dpa/412786771
- Published: 2019-07-03T07:32:51+01:00
- Author: Amilia Stone

**Serco Group plc** (LON:SRP), the international service company, today announced
that one of its UK subsidiaries, Serco Geografix Ltd, has reached an agreement in
principle to a Deferred Prosecution Agreement with the UK Serious Fraud Office. 
This proposed DPA is subject to final judicial approval, and SGL and the SFO will
both appear in court on 4 July 2019 to seek this approval.  If confirmed by the 
Court, this would conclude the SFO’s investigation into Serco companies announced
in November 2013.

**Key points**

·    Serco Geografix Ltd has taken responsibility under the terms of the proposed
DPA for three offences of fraud and two of false accounting committed between 2010
and 2013 related to the reporting to the UK Ministry of Justice (MoJ) of the levels
of profitability of Serco’s Electronic Monitoring (EM) contract.  These issues were
reported by Serco to the SFO and the MoJ in November 2013.

·   Investigations into allegations of wrongful billing which were the subject –
understandably – of significant public and Parliamentary concern in 2013 have now
been concluded without any criminal charges against Serco.

·     SGL will pay a fine of £19.2m together with £3.7m related to the SFO’s investigation
costs.  The fine reflects a discount of 50% as a result of Serco’s self-reporting,
as well as its significant and substantial cooperation with the investigation.  
No damages or disgorgement of profit will be payable to the MoJ because the SFO 
has agreed that Serco has already fully compensated the Department in respect of
the offences as part of a £70m settlement paid by Serco to the MoJ in December 2013.

·    The SFO has recognised the significant steps Serco has taken to reform itself,
including the thorough implementation under independent supervision of a comprehensive
Corporate Renewal Programme approved by the UK Government.  This programme included
over 80 actions and initiatives, and included rewriting our system of management
control, as well as strengthening our bidding, contract management, internal audit
and management assurance processes. 

·    Nobody who sat on the Board of Serco Group, or who was part of the Executive
Management Team at the time these offences were committed, works for Serco today.

·    Alongside the DPA, Serco has assumed certain obligations including on-going
co-operation with the SFO and further strengthening of its Group-wide Ethics and
Compliance functions, as well as agreeing to report annually to the SFO and the 
Cabinet Office on the Group’s assurance programme.

·     In June 2016, the Financial Reporting Council (FRC) announced an investigation
into the conduct of the Group’s auditors at the time, Deloitte.  Nothing in these
matters impacts the previously reported statutory accounts of Serco Group.

> **Rupert Soames, Serco Group Chief Executive, said**: “Those of us who now run
> the business are mortified, embarrassed and angry that, in a period between six
> and nine years ago, Serco understated the level of profitability of its Electronic
> Monitoring contract in its reports to the Ministry of Justice.  Serco apologised
> unreservedly at the time, and we do so again.  Nobody who sat on the Board of 
> Serco Group, or who was part of the Executive Management Team at the time these
> offences were committed, works for the Group today. 
> “Over the last six years we have worked extremely hard to regain the trust and
> confidence of Government, implementing in its entirety a Corporate Renewal Programme
> which was approved by Government and which has helped us to transform our corporate
> culture, processes and governance.  The management and culture of Serco, and the
> transparency with which we conduct our affairs, have changed beyond all recognition,
> and we are pleased that this has been acknowledged by both the SFO and by the 
> Government.” 

Serco has been advised on these matters by our corporate lawyers, Clifford Chance
LLP.

Share on: