Compass to probe UN contract |
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Published
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Fri, 21 Oct 2005 16:05
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LONDON: Caterer Compass Group dropped 5.8 percent at 174p a share on the FTSE 100 and was trading at 168.5p - its lowest in many years. The stock prices reflected the mood at the catering company which suspended one of its divisional heads as part of an investigation into procurement procedures involving United Nations’ contracts.
Law firm Freshfields was hired by the caterer to investigate how contracts are awarded and the relationship between the UN, Eurest Support Services (ESS) – Compass’s subsidiary and IHC, a former vendor-contractor to the UN’s procurement department.
Peter Harris, chief executive of Compass’s UK, Ireland, Middle East and Africa divisions was suspended pending the investigation. The caterer took the step after the UN demanded to know how ESS (once headed by Harris) could have come across confidential documents that contained details about a £35m three-year contract with the UN.
ESS is also a supplier to the defense sector and remote offshore sites. The company claimed ESS had received the documents in an e-mail from IHC. The documents provided detailed information about a contract to supply food and water to the peacekeeping force in Liberia.
The caterer had confirmed two weeks ago its intention to help with the investigation saying ESS would be cooperating with the authorities.
Meanwhile Gary Green, CEO of the caterer’s Americas division has agreed to take over as interim chief executive after Harris.
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