Outsourcing group Serco, which provides prison escort services to the courts, is set to drop out of the FTSE 100 after shares were hit by allegations of fraud and overcharging.

The allegations relate to the falsification of documents by Serco staff which made it look as if prisoners had been delivered to courts on time, and the overcharging of millions for tagging services.

In response to the claims which led an on-going police investigation, Serco shares fell by 17.4 per cent since July, with the market capitalisation of the company falling to £2.8 billion.

The drop in market value now places the outsourcing provider in the FTSE 100 relegation zone.

Serco Chris Hyman, chief executive of Serco, said after the reveal of misreporting, that the company would move to “immediately initiated a programme of change and corporate renewal."

Serco working with the Government to fix prisoner escort service

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