Go-Ahead tumbles 25% with report of possible fraud inquiry at Southeastern franchise

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Go-Ahead Group PLC has referred itself to the Serious Fraud Office over the payment discrepancies that today saw it lose the Southeastern rail franchise, according to a report in the Telegraph.


Shares in the bus and rail group tanked by 25% after the Department of Transport revealed the circumstances surrounding its decision this morning and that LSER, the franchise operator, had kept GBP25mln of money that should have been paid back to the government.


The DfT has appointed a new operator to take over the franchise from 18 October and said it was looking into other rail franchise contracts awarded to Govia, the joint venture between Go-Ahead and French group Kelios that runs LSER.


Go-Ahead stripped of Southeastern franchise after ‘serious breach of good faith’


According to reports today, the issue relates to charges for services run on the HS1 high-speed track and date back as far as 2014.


An investigation headed by the chairs of Go-Ahead and Kelios was launched in August and the extent of any further liabilities will be detailed when it eventually publishes its annual results said the UK group.


Annual results were delayed again today due to the issues at Southeastern having been scheduled to be released on Thursday.


Govia Thameslink, the line that runs through London and links Luton Airport to Gatwick, will also be investigated by the DfT according to the report, though sources close to Go-Ahead said the issues at Southeastern were an isolated incident.


“The Serious Fraud Office is aware and its position is that it can neither confirm nor deny interest. There is no more we can say about that in the circumstances,” a spokesman for Go-Ahead was quoted as saying.


Shares in the company had tumbled 25.3% at 766p near the end of the day.

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