A surprising, and potentially explosive, twist to the ongoing SERCO fraud scandal (see previous blogs):
The shareholders, including the BBC, BA and Shell Pension Funds, are suing SERCO in the wake of disclosure, in a court hearing last summer, that SERCO’s margins on the tagging contract had been way ahead of forecasts as early as 2006. Presumably they will claim that SERCO’s concealment of their true profit margin artificially inflated share prices, and that eventual discovery of this led to a catastrophic collapse in the share price and thus the pension funds’ assets. Potentially, the claim could be for many hundreds of millions.
This is of particular interest given that Judge William Davis observed last summer that the fraud had been organised by and for the benefit of the SERCO main company, but that no ‘directing mind’ within the main company could be identified and charged. It will be interesting to see the argument run, that SERCO is not liable for the civil suit, because no one was actually directing the company.
I was formerly Finance Director of the Prison Service and then Director of the National Offender Management Service responsible for competition. I also worked in the NHS and an IT company. I later worked for two outsourcing companies.
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