27 Oct 2013

Prison operator's head steps down

10:06 am on 27 October 2013

The chief executive of British prison operator Serco has quit as part of a major reorganisation following a series of scandals.

Serco has more than 120,000 staff in more than 30 countries, including New Zealand where it runs the private Mount Eden remand prison.

It will also run a new $840 million jail in Wiri, south of Auckland, when it opens in 2015.

The British Government, which accounts for about 25% of Serco's revenue, announced three months ago it would not award the company any new contracts pending a review of existing ones.

An audit found Serco and a rival company had both charged for electronically tagging criminals who were dead, in prison or not being monitored.

Serco says British chief executive Chris Hyman has resigned and has been replaced by the group's chief operating officer, Reuters reports.

As part of a company-wide overhaul, Serco says it will strengthen its board by adding three new non-executive directors.

In New Zealand, Serco has twice been fined $150,000 for letting inmates escape. The company was ordered to make operational changes as a result.

The Corrections Department said on Saturday that Mount Eden is one of the country's top performing prisons, and there will be no change to Serco's contracts with the government.