The investigation of fraud case for De La Rue has been expanded to include banknote paper supplied to the republic of Venezuela. The probe is now examining whether certificates vouching for the quality of the banknote paper De La Rue provided to the South American nation were falsified. Earlier this month De La Rue, the world’s largest banknote printer, confirmed employees faked the results of quality control tests on paper used for banknotes, but refused to name the clients affected.
The reserve Bank of India, which accounts for up to 25pc of the company’s profits, is widely reported to have been the main focus of the investigation. But now it has emerged that banknote paper sold to Venezuela may also have been affected. Shares in De La Rue have already fallen 30pc over the past 3 months and the development that a second country is implicated will heighten fears the true extent of the problem is wider than first thought. De La Rue produces hard currency for more than 150 countries and recently called in law firm Herbert Smith to conduct a review of the crisis. Herbert Smith is now examining the quality of banknote paper printed at a high-security mill in Overton, Hampshire, for Venezuela. The probe could take as long as a year and has yet to establish why the irregularities arose. A spokesman for De La Rue emphasised the security of its paper has never been compromised.
The company admitted in July that it had uncovered ‘quality and production irregularities’ at a plant producing high-security paper. Last month chief executive James Hussey abruptly quit, declaring that he had decided to take responsibility for the debacle. Hussey’s parents are the late Marmaduke Hussey, former chairman of the board of governors of the BBC, and Lady Susan Hussey, Woman of the Bedchamber to Queen Elizabeth II. Herbert smith has called in the serious Fraud Office, which is monitoring the internal inquiry. Paper was shipped to customers before De La Rue realised that the results of quality control tests had been compromised.
Source: Dailymail.co.uk
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