Serco chief executive stands down

25 October 2013 Last updated at 08:09 ET

The chief executive at Serco, a security firm at the centre of an overcharging scandal, has resigned.

Outgoing boss Chris Hyman said the best way for the company to move forward "is for me to step back".

Serco is being investigated by the Serious Fraud Office (SFO) after claims it had overcharged the government by "tens of millions" of pounds for electronic tags for criminals.

The government welcomed the news, describing it as a "positive move".

Serco has also announced plans to reorganise the company.

The firm said it would split the government work into a separate business that could be more closely monitored.

A government statement said it would "take full account of all the changes Serco have made today".

"Whilst it is early days in their programme of renewal, this is a positive move by Serco and a step forward."

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The statement added that its review of government contracts, announced in July by the Justice Secretary, was ongoing and it would "ensure government's contractual arrangements are robust and taxpayers' money is spent responsibly, in a vibrant, competitive market for public services."

Shares in Serco were up 2.8% after the news.

Mr Hyman said he had "always put the interests of Serco first", adding that it was important the relationship with the government was rebuilt.

He said: "I have been fortunate enough to have had the privilege of working at a great company with extremely talented people. I wish everyone at Serco the very best for the future."

Earlier this year, Justice Secretary Chris Grayling said Serco and another security firm, G4S, had been charging for tagging some offenders who had left the country, were still in prison, or were dead.

No new contracts are being awarded to either of the firms until the audit is completed, said the government in September.

Head of G4S Richard Morris also stepped down yesterday.

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