Yahoo Finance UK’s biggest rail operator Go-Ahead to suspend shares after ‘serious errors’ in accounts
Britain’s biggest rail operator is set to suspend trading in its shares as it grapples with the fallout from a failure to repay tens of millions of pounds of taxpayer cash.
Shares in the former FTSE 250 operator plunged 15pc as it warned it will not be able to file its accounts by a deadline of Jan 3.
The failure leaves Go-Ahead with no option but to suspend trading in its shares from Jan 3 and risks leaving it in default with its lenders.
It also leaves the company in danger of a takeover by one of its rivals and calls for its bosses to repay nearly £5m in bonuses paid to them since 2015.
Go-Ahead and its joint venture partner Keolis were stripped of Southeastern rail line in September after it emerged that executives had not repaid £25m that was owed to the Exchequer in 2014.
Go-Ahead said on Thursday that a subsequent investigation had uncovered “serious errors … over several years”.
Due to the complexities of the scandal and the company being unable to quantify any fines it will need to pay for the failings, Go-Ahead is now expected to file its accounts in late January.
Louise Haigh, Labour’s shadow transport secretary, said it was “unthinkable” that Go-Ahead’s bosses should retain their bonuses. Analysis of annual reports by The Telegraph indicated that former chief executive David Brown and his finance chiefs were paid £4.8m in cash and share bonuses between 2015 and 2019. No bonuses were paid in 2020.
“The company should show some basic decency and claw those bonuses back for the taxpayer,” Ms Haigh added.
Harry Fone of the TaxPayers' Alliance said: "The public will be furious at this shocking state of affairs. Ministers must do everything possible to claw back as much of it as possible."
A spokesman for Go-Ahead said: “The group is working through the implications of the findings of the report and will take whatever action is appropriate.”
Shares have more than halved since April this year in the wake of the scandal.
David Martin, chairman of rival FirstGroup, said he would not rule out considering a potential takeover, although any swoop could be blocked by competition regulators. The company is now worth little more than £250m but boasts annual revenues in excess of £3.5bn.
“I am alive to all opportunities,” Mr Martin said.
Go-Ahead’s plight has also worsened abroad. It is facing big losses on a rail contract in Norway and has yet to agree funding from the government in Oslo.
It said: “Unless a satisfactory agreement can be reached, the board expects that a material provision would be required in the FY21 results for potential losses in our rail contract in Norway.”
Meanwhile, Go-Ahead is facing further losses in Germany. It has previously racked up £26m in losses for its operations in Bavaria.
The company said: “A further provision of up to £10m is expected to be recognised in the [annual] results.”
