G4S share price: Security groups apologise for tagging overcharges

on Nov 21, 2013
Updated: Oct 21, 2019

iNVEZZ.com, Thursday, November 21: The new boss of G4S (LON:GFS) has apologised to the UK taxpayer for overcharging on contracts for tagging criminals, The Telegraph has reported. Serco (LON:SRP) chairman has also admitted that it was ‘ethically wrong’ that his company also overcharged the Ministry of Justice.

The apology came after earlier this week the government rejected G4S’ offer of a £24 million credit note to settle the scandal. G4S’ share price has gained about 0.50 percent in morning trading in London today, whereas the Serco share price is more than three percent up.
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**G4S and Serco apologise**
The Telegraph quoted G4S’ chief executive Ashley Almanza as telling MPs on the Public Accounts Committee (PAC) that employees had failed to distinguish between “right and wrong” when the security group overcharged taxpayers for tagging offenders – some of whom were dead, back in prison or were never tagged in the first place.

“It was just a flawed judgment,” he said. “I don’t think we did correctly tell the difference between right and wrong. We got it wrong.”
Serco’s chairman Alastair Lyons admitted that his company had also got it wrong. “It was never right that we should bill where we were not doing work in respect of that billing,” Lyons said, as quoted by The Telegraph. “It was ethically wrong.”

Both Serco and G4S are facing an investigation by the Serious Fraud Office (SFO) which focuses on electronic offender-tagging contracts awarded by the government. All government contracts held by the two groups have been under review since July.
“If you hadn’t been caught out you would have carried on charging until the year 3000,” pointed out PAC chairman Margaret Hodge, as quoted by The Telegraph.

**Ministers reject G4S offer to repay £24 million**

The news of the apology came after earlier this week ministers rejected G4S’ offer of £24 million in credit against future contracts to cover the ‘wrongly’ billed amounts, until reviews of the contracts were complete.
The Times reported that a National Audit Office report published on Tuesday disclosed how G4S and Serco had overbilled the Ministry of Justice for electronic monitoring of offenders.
The report showed that in once instance, G4S billed the taxpayer for £4,700 although the monitoring equipment had been removed from an offender’s home 935 days earlier whereas in another an offender was given four separate court orders for four offences and Serco charged four times for a single subject instead of once.
As The Times has noted, audits of the contracts have so far cost the taxpayer more than £2 million which the Ministry of Justice will seek to reclaim from the two security groups.
**As of 09:16 UTC, buy G4S shares at 262.20p.**
**As of 09:16 UTC, sell G4S shares at 262.10p.**
**As of 09:16 UTC, buy Serco shares at 445.40p.**
**As of 09:16 UTC, sell Serco shares at 445.00p.**
Trade these shares now through Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.


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