Tag Archives: loses

Rothschild loses battle over Bumi

21 February 2013 Last updated at 18:43 GMT Nathaniel Rothschild Nathaniel Rothschild was hopeful of regaining control of Bumi, a company he helped found Financier Nathaniel Rothschild has lost his bid to oust the current board of coal mining giant Bumi, the company he helped to found.

Chairman Samin Tan survived a vote to remove him but informed the board he was stepping down.

Mr Rothschild had wanted to rejoin the company and expel 12 of the 14 board members, including the chief executive and chairman.

Shareholders rejected his attempts and voted to remove just two members.

Chief executive Nick von Schirnding also managed to keep his post, with more than 60% of votes cast in his favour at the London meeting.

Mr Tan, who received 57% of votes in favour of his retention, said he would resign once a new independent chairman was found.

The company said it would look for a new chairman “who has experience in, and is familiar to, the London market”, according to a statement.

The two members who were ousted were Jean-Marc Mizrahi and Nalinkant Rathod.

Mr Rothschild set up Bumi with the influential Bakrie family, part of Indonesia’s political and business elite, in 2011.

The deal was intended to offer international investors the chance to buy into natural resources assets in emerging markets while ensuring they were protected by UK market rules.

Fraud allegations

But the partnership, and relations with the Bakrie family, soured after Mr Rothschild called for a radical clean-up at the firm.

To make matters worse, he made allegations of potential misuse of development funds and other assets at the firm in September 2012.

Allegations of financial irregularities at Bumi’s key Indonesian operating subsidiary, PT Bumi Resources – in which it owns 29% alongside the Bakrie family – first emerged that month, after Mr Rothschild received information from a whistleblower.

However, an investigation by legal firm Macfarlanes, commissioned by the London-listed parent company, said the evidence provided to Mr Rothschild comprised emails that had been obtained illegally, something Mr Rothschild denies.

Macfarlane said the claims that money intended to finance development of coal mines had been misappropriated could not be substantiated, in large part due to “the unwillingness of key parties to be interviewed and provide information”.

Bumi’s management said that it had referred the matter to the relevant authorities, including the Indonesian financial services authority, and the UK Serious Fraud Office.

Mr Rothschild quit the board in October.

Bumi’s new chief executive, Mr Schirnding, has negotiated an amicable divorce with the Bakrie family, including the sale of the family’s stake in PT Bumi Resources for $580m (£370m), and the family’s divestment of its 24% in the London-listed company.

But the board warned that the deal would be scuppered if Mr Rothschild succeeded in retaking control of the company.

The company’s share price has slumped 60% since it listed in 2011.

UK loses top credit rating

Posted February 23, 2013 21:41:22

Ratings agency Moody has downgraded the UK’s credit rating from AAA to Aa1.

It is the first time since the 1970′s that Britain has not had the top rating…

The downgrade is a huge political blow for the government, especially chancellor George Osborne who said it was a stark reminder of the debt problems facing the country.

Moody’s said the government’s debt reduction program faced big challenges ahead as the British economy struggles with recession and unemployment.

The UK has enjoyed a AAA rating since 1978 and Moody’s said economic growth would remain sluggish, but added the country ‘s credit worthiness remains extremely high.

Shadow chancellor Ed Balls said it was a “humiliating blow” to the chancellor and the prime minister who had said the AAA rating was a mark of economic and political credibility.

Topics: world-politics, business-economics-and-finance, economic-trends, united-kingdom

Fortescue loses Pilbara rail access fight


Fortescue Metals Group (FMG) says it is confident an Australian Competition Tribunal decision to block its access to Rio Tinto rail lines will not impact on operations.


The miner had been seeking access to Rio’s Hamersley and Robe railway lines in the Pilbara to transport its iron ore to port.


After nine years of legal proceedings, a High Court decision in September referred the matter to the Tribunal, which today ruled Rio does not have to open its railway lines to other operators.


In a statement, Rio said its operations would have been severely hindered if third parties had been allowed to run trains on the network.


Morning Star resource analyst Matthew Hodge agrees it is unlikely Fortescue will be impacted by the decision.


“They’ve put infrastructure in place to expand out to 155 million tonnes,” he said.


“So they’re spending the money to do that. They’ve got the financing in place and the iron ore price is quite favourable right now so they’ll just be planning on and doing what they were going to do anyway.


“I think they lose an option to potentially get some free tonnes down Rio Tinto’s railway line, that’s pretty much all it means.


“Otherwise they would have had to build their own but that’s what they’re going to do anyway.”


Mr Hodge says if access had been allowed, it may have opened up access to the iron ore industry.


“If you build something, you operate it, you own it, you would think that you have control over that,” he said.


“It did look for a while that the lines were going to be declared. There’s obviously been a lot of legal action since then to get us to this point.


“If it’d happened it would have lowered the barrier to entry for new competitors in the iron ore place.”

Topics: mining-industry, iron-ore, wa, perth-6000

First posted February 11, 2013 16:54:23

Ryanair loses EU ash cloud case

Ryanair plane taking off from Barcelona - file pic Ryanair and other airlines incurred big losses in the ash cloud disruption Ryanair should have fully compensated a passenger whose flight was cancelled because of the volcanic ash cloud in 2010, the EU’s top court has said.


On such occasions there is no limit – in time or money – to the airline’s duty to look after its passengers, the European Court of Justice (ECJ) ruled.


Denise McDonagh had a seven-day wait for a Faro-Dublin flight on Ryanair and said she spent nearly 1,130 euros (£968) on a hotel, food and transport.


Her compensation has not yet been paid.


Ryanair had argued the eruption of Iceland’s Eyjafjallajokull volcano was so extraordinary that normal rules should not apply.


But the judges’ ruling – now binding across the EU – said such events “constitute ‘extraordinary circumstances’ which do not release air carriers from their obligation to provide care”.

Unacceptable hazard

The EU regulation on passenger rights “does not provide for any limitation, either temporal or monetary, of the obligation to provide care to passengers whose flight is cancelled due to extraordinary circumstances”, the ECJ said.


“Thus, all the obligations to provide care to passengers are imposed on the air carrier for the whole period during which the passengers concerned must await their re-routing.”


Ryanair has already paid out 27m euros to compensate people left stranded by the ash cloud, BBC transport correspondent Richard Westcott reports.


The airline is not expecting a rush of new claims, because it has settled its ash cloud debts already, our correspondent adds. But it had hoped to win the case in order to limit such claims in the future.


Much of north Europe’s airspace was closed for more than a week in April 2010, as the volcano spewed dust into the atmosphere.


Aviation officials feared the dust could stop jet engines – an unacceptable hazard – and Ms McDonagh was among the thousands left stranded.


The ECJ ruling on Thursday said an Irish court must decide the amount of compensation to which Ms McDonagh is entitled. Her case had been referred to the ECJ by the Dublin Metropolitan District Court, which had sought clarification of EU law.


The passenger is entitled to “reimbursement of the amounts which proved necessary, appropriate and reasonable to make up for the shortcomings of the air carrier”, the ECJ said.

Apple loses most valuable crown

Continue reading the main story Apple has lost its crown as the world’s most valuable publicly traded company after its shares continued to fall.


Oil company Exxon Mobil has regained the top slot after Apple shares fell 2.4%, following a 12% drop on Thursday.


Apple, which posted disappointing iPhone sales figures on Wednesday, has seen its shares fall 37% since their record high last September.


Exxon became number one in 2005, traded places with Apple during 2011, and had been number two since early 2012.


At the close on Wall Street, Apple had a market value of $413bn (£261bn), against Exxon’s of $418bn.


The tech giant has been hit by fears over its future growth, despite record profits.


Although the firm said on Wednesday that it had sold more iPhones (47.8 million) and iPads (22.9 million) in the final three months of last year than in any previous quarter, investors and analysts had expected yet more.


On Thursday, about $50bn was wiped off Apple’s value after the biggest daily drop in the firm’s stock in four years.


Apple is also facing fierce competition from rivals like Samsung, which accounted for one in four of all mobile phones shipped worldwide last year, according to Strategy Analytics.


Apple’s share price rose sharply following a revival under Steve Jobs, who died in 2011, which came about first in computers and then the iPod music player, and was then followed by the iPhone and iPad.


Apple’s shares were worth as little as $3.19 in 1997 when it faced the possibility of bankruptcy, and reached a record $702.1 on 19 September.

ActewAGL loses govt contract


ACT electricity provider ActewAGL has lost a major contract to supply electricity to its part-owner, the ACT Government.


The major contract was awarded to Queensland company ERM Power Retail, which began supplying energy to the government’s major outlets on January 1.


It is believed the contract is worth about $16 million over two years.


ActewAGL did secure two other government contracts which are worth about $6 million.


Territory and Municipal Services Minister Shane Rattenbury says the decision was made by directorate representatives based on a tender process.


“I imagine ActewAGL are incredibly disappointed to lose this contract but it is a competitive process,” he said.


“The decision to award the contract to ERM, I’ve been briefed by the officials, they offered the best value for money for the Territory and that’s the basis on which they took their decision.”


Treasurer Andrew Barr says he was surprised to hear the news as a shareholder, but says it will have very little impact on the Government’s bottom line.


He says the ACT will save money due to the reduction in electricity prices.


“Our business here is to get the best price for electricity,” he said.


ActewAGL head of marketing Paul Walshe says the company will continue to sponsor Canberra centenary events.


He says there are no plans to cancel sponsorship commitments this financial year.


“It’s a tough business retail electricity. You win some contracts and lose some contracts and from our community sponsorship point of view we’ll continue with our current community sponsorship program,” he said.


“Like any company we have a budget, we have a sponsorship committee, and a review process where we review every sponsorship.”


In a statement, ActewAGL acting chief executive officer John Knox says the company remains competitive in the ACT market, demonstrated by steady growth in customer numbers.


“We remain committed to our customers, to supporting our local community through our sponsorships program, delivering excellent customer service and helping our customers manage their energy costs,” he said.

Topics: electricity-energy-and-utilities, states-and-territories, act, canberra-2600

First posted January 17, 2013 07:57:49

News Corp publishing loses $2.1bn

21 December 2012 Last updated at 18:22 GMT News International The News Corporation UK newspapers will be separated from its TV and film interests News Corporation says its publishing wing incurred a $2.1bn (£1.3bn) loss in the last financial year.

Revenues fell 5%, partly as a result of the closure of the News of the World, which it stopped publishing after the phone-hacking scandal broke in the UK.

The company detailed the losses as it formally applied to US regulators the Securities and Exchange Commission to split its business into two.

News Corp plans to separate publishing from its film and TV business.

The publishing arm, which News Corp said had made a profit of $678m the year before, will be called New News Corp. It will include book publisher Harper Collins, the Times and the Sun newspapers in the UK, the Wall Street Journal, the New York Post and the Australian.

The more lucrative TV and film business will be the parent company and will be called Fox Group.

It will include the US news channel Fox News and the 20th Century Fox film studio.

‘Adverse trends’

The loss made by the publishing arm included a $2.6bn impairment charge, after writedowns of $1.3bn for goodwill and $1.3bn for other intangible assets, primarily newspaper mastheads and distribution networks.

These impairment charges were largely the result of “adverse trends affecting several businesses”, including a weakening economic environment in Australia and lower predicted revenues from certain businesses.

The charges also reflected the expected sale of certain assets at a value below their carrying value, News Corp said.

The company first announced its plan to split in June, after pressure from shareholders who were concerned about the damage done to the publishing business by the events at the News of the World.

Robert Thomson, who is currently the managing editor of the Wall Street Journal and previously edited the Times, will be head of the new publishing company.

He will receive an annual salary of $2m, and a performance-based annual bonus with a target of $2m.

Rupert Murdoch will carry on as chairman and chief executive of the parent company, for which his compensation totalled $30m in the last year.

His pay will increase “modestly” as he takes on the role of executive chairman of the publishing company.

BlackBerry maker loses patent battle with Nokia

AYESHA SIDDIQUI


KARACHI: BlackBerry maker, Research in Motion (RIM), has lost its battle over contract dispute over the use of Nokia patents.


Nokia had signed a cross-license agreement with RIM which covered standards-essential cellular patents in 2003, which was amended in 2008. However, RIM sought arbitration with the Stockholm Chamber of Commerce in 2011 debating that the license should be extended to cover WLAN patents.


According to sources Nokia said the Swedish judge ruled that RIM had breached its contract and was not entitled to manufacture or sell WLAN without first agreeing royalties with Nokia.


Nokia is amongst the leading patent holders in the wireless industry and plans to boost royalties in patents as their phone business slides. They have also gone to the US, Britain and Canada to enforce the ruling.


RIM faces ban on all their phones and BlackBerry 10’s launch in the first quarter of 2013, which can be a major blow to the company if they do not settle royalties with Nokia.


This means that even if it spells financial loses for RIM they are expected to resolve the issue as their latest phone has already faced quite a delay.


Copyright Business Recorder, 2012

Rinehart loses appeal over stake in ore deposit

Updated October 30, 2012 22:54:18

Mining billionaire Gina Rinehart’s Hancock Prospecting has lost an appeal to retain a 25 per cent stake in the Rhodes Ridge iron ore deposit in WA’s Pilbara.

The company was appealing against a 2010 Supreme Court decision which awarded Hancock’s stake to rival Wright Prospecting because of an agreement signed by the companies’ founders, Lang Hancock and Peter Wright.

The two signed the agreement in 1984 to divide their assets in an effort to prevent any disagreements between the families.

In a letter to Mr Wright, Mr Hancock outlined his intentions.

“If we don’t divide these assets in a way that is final and binding, there will be litigation,” he stated.

The two families argued over the agreement.

In March 2010, the Supreme Court ruled in favour of Wright Prospecting and ordered Mrs Rinehart’s company to hand over its 25 per cent holding in the project.

Hancock Prospecting then took the decision to the Court of Appeal, but Justice Carmel McLure today ruled in favour of the Wrights.

“The intention and purpose of the 1984 agreement is unambiguously clear,” she stated.

The stake is a share in the Rhodes Ridge iron ore deposit potentially worth billions of dollars.

Mining giant Rio Tinto is a 50 per cent shareholder in the joint venture.

In a statement, Wright Prospecting has welcomed the decision, saying it enforces and protects its rights.

Hancock Prospecting is yet to comment.

Topics: courts-and-trials, mining-industry, tom-price-6751, perth-6000

First posted October 30, 2012 17:02:38

Apple loses tablet copyright appeal against Samsung

LONDON: Apple has lost its appeal against a ruling that cleared rival Samsung of copying its registered designs for tablet computers, in a decision which could end the two firms’ legal dispute on the subject across Europe.

The world’s two leading smartphone makers are fighting over patents, both for smartphones and for tablets like Apple’s iPad, in courts around the world.

Britain’s Court of Appeal on Thursday upheld the country’s High Court judgment that, despite some similarities, Samsung’s Galaxy tablet did not infringe Apple’s designs, in part because its products were “not as cool”.

The decision is valid throughout Europe and should prohibit further legal disputes between the two companies over the design of tablets in the region.

South Korea’s Samsung welcomed the decision saying in a statement: “We continue to believe that Apple was not the first to design a tablet with a rectangular shape and rounded corners”.

Apple declined to comment on the decision.

The U.S. company has been instructed to run advertisements saying Samsung did not copy its registered tablet designs, both on its website and in selected newspapers.

Apple can appeal to the Supreme Court.

“I expect this will be the end of the line. An appeal to the Supreme Court is in principle possible but there has been no indication so far that Apple plan such an appeal”, Darren Smyth partner at EIP, a specialist intellectual property law firm, told Reuters.

“For the design of tablets in Europe this should be the final word.” (Reuters)

Apple loses appeal against Samsung

London: Apple has lost its appeal against a ruling that cleared rival Samsung of copying its registered designs for tablet computers, in a decision which could end the two firms’ legal dispute on the subject across Europe.

The world’s two leading smartphone makers are fighting over patents, both for smartphones and for tablets like Apple’s iPad, in courts around the world.

Britain’s Court of Appeal on Thursday upheld the country’s High Court judgment that, despite some similarities, Samsung’s Galaxy tablet did not infringe Apple’s designs, in part because its products were “not as cool”.

The decision is valid throughout Europe and should prohibit further legal disputes between the two companies over the design of tablets in the region.

Article continues below

South Korea’s Samsung welcomed the decision saying in a statement: “We continue to believe that Apple was not the first to design a tablet with a rectangular shape and rounded corners”.

Apple declined to comment on the decision.

The US company has been instructed to run advertisements saying Samsung did not copy its registered tablet designs, both on its website and in selected newspapers.

Apple can appeal to the Supreme Court.

“I expect this will be the end of the line. An appeal to the Supreme Court is in principle possible but there has been no indication so far that Apple plan such an appeal”, Darren Smyth partner at EIP, a specialist intellectual property law firm, told Reuters.

“For the design of tablets in Europe this should be the final word.”

China loses US steel tariff plea

 China and the US are involved in trade disputes involving a range of products including steel The World Trade Organisation (WTO) has upheld its decision that China’s tariffs on imports of certain US steel products were illegal.


Beijing had imposed duties on a particular kind of US steel, alleging that its makers were being given subsidies by the US government.


The WTO ruled against the tariffs in June, a decision it upheld saying that China had failed to prove its charges.


The case is the latest in a series of trade conflicts between the counties.


“Today we are again plainly stating that we will continue to take every step necessary to ensure that China plays by the rules and does not unfairly restrict exports of US products,” US trade representative Ron Kirk said.

‘Beating China’

Disagreements between China and the US have been growing in recent times and the two have sparred over issues ranging from China’s currency policies to allegations of state subsidies given to Chinese firms.


The US has upped its ante against Beijing recently, not least because of the upcoming presidential elections.


The impact of China’s growing economic might on the US economy, and how the US should respond to it, has become a key issue in the elections.

Continue reading the main story
[It's] a small benefit for the Obama campaign because it can advertise ‘beating China’ in Ohio”

End Quote Derek Scissors Heritage Foundation Both President Barack Obama and challenger Mitt Romney have pledged to put more pressure on Beijing.


If elected, Mr Romney has vowed to formally label China a “currency manipulator” on his first day in office, opening the way to trade sanctions.


Last month, Mr Obama filed a complaint against China with the WTO, accusing it of illegally subsidising car exports.


That was in addition to two other complaints the Obama administration has filed with the WTO against China this year.


The first accused Beijing of restricting its exports of so-called rare earth metals, used to make high-tech devices.


The second accused Beijing of unfairly imposing anti-dumping duties on US cars exported to China, making them more expensive to buy. The US alleged that the move was designed to protect Chinese manufacturers.


But despite these actions, Mr Romney has accused Mr Obama of being too soft on China.


Analysts said the latest decision by the WTO was likely to provide a boost to Mr Obama’s campaign.


“[It's] a small benefit for the Obama campaign because it can advertise ‘beating China’ in Ohio,” said Derek Scissors, a research fellow at the Heritage Foundation.

Linfox loses appeal over truckie’s Facebook comments

Updated October 03, 2012 16:17:21

Fair Work Australia has dismissed an appeal by transport company Linfox, which tried to sack an employee for making derogatory comments about two of his managers on Facebook.

The industrial umpire ruled last year that Glen Stutsel was unfairly dismissed by the company and that he should be reinstated and paid compensation for lost wages.

Mr Stutsel had been employed as a truck driver with Linfox for more than 20 years, but was sacked after making comments on his Facebook page about two managers, Mick Assaf and Nina Russell.

Fair Work Australia had ruled that Mr Stutsel’s comments about the death of a Muslim terrorist were “distasteful”, but were within the employee’s right to free speech and could not be considered a personal attack on one of his managers, who is a practising Muslim.

It described a second comment, which referred to his manager as a “bacon hater”, as being in “poor taste” but was not meant to be hurtful.

The industrial umpire found that sexual comments about a female manager were “outrageous”, but most of them were made by his Facebook friends in response to Mr Stutsel’s comment.

In making its decision last year, Fair Work Australia found that the company did not have a social media policy and its induction training materials were inadequate grounds to sack the employee.

Linfox launched an appeal on the basis the ruling was unfair, gave insufficient weight to relevant facts and placed undue emphasis on a “purported right to free speech”.

But a three-member panel of Fair Work Australia has today upheld the original ruling.

During the original hearing, Mr Stutsel, who is a Transport Workers Union delegate, expressed a belief that his Facebook profile was on maximum privacy settings and comments posted on his page could only be viewed by his 170 online friends.

Fair Work Australia says it took into account Mr Stutsel’s limited understanding of how Facebook worked, but said such claims of ignorance are likely to be viewed less favourably in the future as more and more people join social media websites.

The industrial umpire also issued a warning to all employees to be careful about what they post on Facebook.

“Unlike conversations in a pub or cafe, the Facebook conversations leave a permanent written record of statements and comments made by the participants, which can be read at any time into the future until they are taken down by the page owner,” the appeal panel said.

“Employees should therefore exercise considerable care in using social networking sites in making comments or conducting conversations about their managers and fellow employees.”

Topics: industrial-relations, social-media, australia

First posted October 03, 2012 16:10:15

Qantas loses landmark GST court case

Updated October 02, 2012 17:20:32

The High Court has ruled against Qantas in a landmark case seen as a key test of the Goods and Services Tax.

In a majority decision, the court ruled Qantas must pay GST to the Tax Commissioner on fares received, whether or not the passenger actually took the flight.

Qantas and Jetstar wanted to get back from the Australian Tax Office $34 million in GST that had been collected from customers who did not take flights they had booked.

The airline had argued it did not supply a service and therefore should not have to pay the tax.

However, the High Court found that Qantas and Jetstar’s contracts with their passengers did not provide an unconditional promise to carry passengers or their baggage on a particular flight.

“They supplied something less than that. This was at least a promise to use best endeavours to carry the passenger and baggage, having regard to the circumstances of the business operations of the airline,” the majority judgment of justices Gummow, Hayne, Kiefel and Bell stated.

“This was a “taxable supply” for which the consideration, being the fare, was received.”

Therefore, the promise was a service subject to the GST.

One judge, Justice Dyson Heydon, found in favour of Qantas, but even he acknowledged a victory for the airline would have resulted in customers having paid money to it that they were told would go to the ATO.

“The respondent [Qantas] seeks to acquire money paid by passengers who intended or expected that it would end up in the hands of the appellant [the ATO], not those of the respondent,” he observed.

“If the respondent’s argument is correct, the passengers who have not claimed their fares back have left the respondent in a position to gain money which it was never meant to have.”

In a statement, Qantas said it was disappointed with the court’s decision but said the ruling would not affect the company’s bottom line because the GST had already been paid to the tax office.

The court ruling comes on the same day Qantas and Australia Post announced they would be splitting their freight joint ventures.

Qantas chief Alan Joyce says the deal brings a $30 million windfall.

“That will be primarily focused at reducing our debt position,” he said.

Qantas will take over Australian Air Express and Australia Post will control Star Track.

Qantas shares were up 2.5 per cent at $1.22 following news of the deal

Topics: courts-and-trials, tax, air-transport, australia

First posted October 02, 2012 11:18:32

Chevron loses $19bn fine appeal

9 October 2012 Last updated at 22:23 GMT Sign at a Chevron petrol station in Los Angeles, California 9 October 2012 Analysts say Chevron is the number two oil company in the US The US Supreme Court has declined to block a judgement from an Ecuadorean court that a US oil firm pay billions in damages for pollution in the Amazon.

Chevron was fighting a ruling that it must pay $18.2bn (£11.4bn) in damages, a sum increased to $19bn in July.

It is the latest move in a decades-long legal wrangle between Texaco, bought by Chevron in 2001, and the people of the Lago Agrio region of Ecuador.

The decision could affect other oil firms accused of pollution.

The high court did not explain why it decided to reject the appeal from Chevron.

The case claimed that Texaco contaminated land between 1964 and 1992, and has triggered several other lawsuits in courts within the US and elsewhere.

But Chevron has said it believes the judgement, handed down by a court in Ecuador in February 2011, is fraudulent and not enforceable under New York law.

In March 2011 a court in New York issued an injunction that blocked the judgement. But it was overturned in January this year by an appeals court, which said Chevron had challenged the judgement prematurely.

The appeals court also said the New York judge could not stop other, foreign courts from enforcing the judgement – something the Ecuadorean plaintiffs are working to do in Canada and Brazil.

The judgement originally ordered $8.6bn in environmental damages, but that was more than doubled because the oil company did not apologise publicly.

“While Chevron is disappointed that the court denied our petition, we will continue to defend against the plaintiffs’ lawyers’ attempts to enforce the fraudulent Ecuadorean judgment, and to further expose their misconduct,” Chevron said in an email statement.

The oil firm has also challenged the judgement under an international trade agreement between the US and Ecuador, due to begin in November.

Capita loses out on criminal records contract

Wednesday, 03 October 2012 17:08 Posted by Asad Naeem

capita 400LONDON: British outsourcing firm Capita said it had lost out on a new government contract to run criminal record checks after the Home Office pursued talks with a rival supplier.

Capita, which has been running the Criminal Records disclosure service for over 10 years in a contract worth around 400 million pounds ($650 million), had been shortlisted to support the coalition government’s new Disclosure and Barring Service (DBS).

“Capita is disappointed not to have been selected by the Home Office to support DBS,” it said in a statement on Wednesday. “We will now work with the CRB, and its new partner, to enable the smooth transfer of the service.”

There was no immediate response from the Home Office on the identity of the winning supplier.

Capita shares, which started the day 18 percent up on three months ago, were down 2 percent to 760 pence in heavy trade at 1114 GMT, the biggest FTSE100 faller.

Espirito Santo analyst David Brockton said the market had half expected bad news for Capita after the contract award was delayed in June.

“We remain cautious on Capita as we believe there will be greater competition for back office outsourced solutions, as supported by the fact that another supplier has been favoured to win the DBS contract.”

The DBS is the merger of the Criminal Records Bureau, which helps employers make safer recruitment decisions, and the Independent Safeguarding Authority, which prevents unsuitable people from working with vulnerable groups, including children.

Capita said pending the finalisation of a full handover of the services to the new supplier the CRB would extend its contract with the firm beyond the current expiry date of March 31, 2013.

In July Capita, whose contracts range from managing over 21 million life and pension policies to providing radios for Britain’s emergency services, posted a 10 percent rise in first half profit and said work with central and local government was piling up.