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Compass admits to serious irregularities in handling of UN contracts

01 February 2006

Compass Group has completed its internal investigation into the UN contracts scandal.

Undertaken by law firm Freshfields with help from accountants Ernst & Young, the investigation looked at the relationship between Compass subsidiary Eurest Support Services (ESS), procurement company IHC and the UN.

In a statement Compass admitted "there had been serious irregularities in connection with contracts awarded to ESS by the UN".

However, the caterer said that specific individuals were to blame and there was no evidence of wider corruption.

Steve Lucas, chairman of the audit committee of Compass, who oversaw the three month investigation, said: "This has been a highly regrettable episode. However, we have now concluded a very through investigation and taken appropriate and decisive action."

Compass has subsequently restructured the senior management of ESS, which now reports to group finance director Andrew Martin. It is also reducing the level of autonomy of ESS.

In November, Compass sacked its UK and Ireland chief executive Peter Harris. Harris used to head up ESS, which is being investigation for corruption over the awarding of UN food and water contracts in Liberia.

It also fired Andrew Seiwert, an ESS mid-ranking executive who was associated with UN contracting.

A criminal investigation by the United States Congress is also underway over two UN food and water deals in Sudan.

By Chris Druce

US government probes Compass food and water deals in Sudan >>

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