Chemring under criminal investigation by UK fraud office
The Serious Fraud Office (SFO) has launched a criminal investigation into alleged money laundering, bribery and corruption at the grenade and ammunition manufacturer Chemring, one of its subsidiaries and individuals associated with the businesses.
Chemring, based in Romsey, Hampshire, designs and makes products such as decoys, flares, detonators and grenades. It also develops systems to protect aircraft and ships against missiles, and sensor equipment to detect improvised explosive devices.
The investigation comes after Chemring Technology Solutions (CTSL) handed its own report to the SFO.
The SFO said its investigation would examine the “conduct of business by Chemring Group and CTSL including … officers, employees, agents and persons”. It declined to comment further during a live investigation.
The company said the voluntary report compiled by CTSL related to two historic contracts. In a note in the company’s full-year results, released on Thursday, it added there were concerns involving intermediaries “who previously represented” CTSL and its “predecessor companies”.
The first contract was awarded before Chemring took over the business – now known as CTSL – while the second took place in 2011.
Chemring said neither of the two incidents were “considered to be material in the context of the group”.
It added it was too early to determine the outcome of the SFO’s investigation but said it was fully co-operating with authorities and would provide further updates “when appropriate”.
Details of the inquiry were announced as Chemring released its full-year results, showing a 15% rise in revenue to £547.5m for the 12 months ending October 31.
Underlying operating profit rose 14% to £55.4m, as a result of an improvement in “consistency of production” and better manufacturing yields as the firm pushes ahead with a restructuring programme that has included closing and merging some of its manufacturing facilities.
Statutory pre-tax profits, however, were down 50% to £4m after accounting for exceptional items, including costs of acquisitions and disposals, restructuring and impairments.
The Serious Fraud Office refused to comment beyond its statement. Chemring shares were up 1.5% at 181p on Thursday.
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