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Serco CEO Christopher Hyman Resigns Amid Overcharging Probe

Christopher Hyman, chief executive officer of global services provider Serco Group Plc (SRP), resigned amid an inquiry into claims the company overcharged the U.K. government for tagging criminals.

“At this time, nothing is more important to me than rebuilding the relationship with our U.K. government customer,” Hyman, who has led the company since 2002, said in a statement today. “In recent weeks it has become clear to me that the best way for the company to move forward is for me to step back.”

Ed Casey, who has led Serco’s America division since 2005, will take over Hyman’s role and begin the search for a new CEO from outside Serco. Shares in the Hook, England-based company gained as much as 5.4 percent and traded 0.8 percent higher at 557 pence at 12.21 p.m. in London, valuing Serco at 2.8 billion pounds ($4.5 billion).

Serco is struggling to regain its reputation as a reliable government services provider since the U.K. Justice Ministry opened an inquiry this year into its handling of a contract to tag prisoners. The company agreed to repay any profit, estimated to be about 2 million pounds, earned since the seven-year, 285 million-pound contract was renewed in 2011, and to forego future profit. Electronic monitoring, or tagging, typically involves requiring offenders to wear a bracelet around their ankle to determine their location.

Serco said it has been “cooperating fully with reviews and audits across a number of our central government contracts” and expects the reviews to conclude in coming months.

Serco will split its U.K. and Europe divisions, with one focused on the U.K. government and the other on the “wider public sector,” the company said in the statement.

To contact the reporter on this story: Natasha Doff in London at ndoff@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

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