LONDON (Reuters) - G4S (GFS.L), the world’s biggest security services firm, said its UK chief executive Richard Morris had resigned and been replaced by the group’s chief operating officer Eddie Ashton.
A company spokesman on Thursday confirmed a newspaper report on the resignation of Morris but declined any further comment.
Morris leaves at a time when the group is trying to recover from a series of damaging setbacks with the British government, one of its key clients, the latest being the discovery that it and rival Serco (SRP.L) had charged for tagging criminals who were either dead, in prison or never tagged in the first place.
That discovery has prompted the government to ask the Serious Fraud Office to consider carrying out an investigation into G4S. Britain has also put all contracts with the firm under review, with the outcome expected next month.
G4S has said it would reimburse any money that is owed on the tagging contract and will work with the government on the audit of all other contracts.
Morris had been with G4S for 10 years and in September 2012 took charge of a UK and Ireland business which generated around a quarter of the firm’s 7.3 billion pound ($11.8 billion) revenue last year.
Ashton joined as COO from Deutsche Post DHL (DPWGn.DE) in July.
Morris’s departure is the second for the UK division in just over a year after David Taylor-Smith left following its failure to supply enough security guards for the 2012 Olympic Games, an embarrassment that severely hit the group’s reputation.
It also comes less than two weeks before new group CEO Ashley Almanza outlines his strategy for the business having been promoted from finance chief in June after a string of setbacks for his predecessor Nick Buckles, including a failed takeover bid in 2011, the botched Olympics contract and a profit warning in May.
Almanza has already raised 348 million pounds through a share sale and said more cash would come from asset disposals as he looks to cut debt and focus on emerging markets growth.
In a trading update on November 5 he is expected to give an update on a restructuring of its UK and Ireland business designed to help boost margins, and could give more detail on group disposals.
Bloomberg has reported that private equity firm Charterhouse Capital Partners CHCAP.UL was thinking of making a $1.6 billion bid for G4S’s cash transportation business, which last year generated around 18 percent of group turnover.
A source familiar with the situation told Reuters that G4S had not held any talks with the group. G4S declined to comment on the speculation.
Shares in G4S, whose services across 125 countries include managing prisons and immigration centres to guarding tennis players at Wimbledon, closed broadly flat at 253 pence on Thursday, up 14 percent on three months ago.
Editing by Greg Mahlich and Anthony Barker