What is G4S and has it always been so controversial?

Olympishambles: the multinational security firm that prompted government to bring in the troops

What is G4S and has it always been so controversial?

 

Security giant G4S has faced public fury during the last few days after it emerged that the company will be unable to provide enough staff to meet its Olympic obligations.

Ministers have been forced to assign 3,500 more Armed Forces personnel to provide security for the Games and the fiasco has been described as an "Olympishambles". The company's CEO Nick Buckles has been called to appear in front of the Home Affairs Select Committee on Tuesday to explain himself. But just where did G4S come from and what exactly does it do?

What are the origins of G4S?

The brand name G4S was established in 2006 and entered the FTSE-100 in 2007 but the company's heritage goes back more than 100 years. It began as a guarding business, founded in Denmark in 1901 by Marius Hogrefe, and has multiplied through mergers and acquisitions - the most significant of which was the merger of Securicor and Group 4 Falck in 2004.

What does G4S do?

G4S describes itself as "the world's leading provider of security solutions". It is the largest employer on the London Stock Exchange, with over 657,000 staff and operations in more than 125 countries, from Saudi Arabia to Serbia and Mozambique.

Its security guards provide airport border controls, protect more than 40 embassies around the world and work as match day stewards at football stadiums. Government contracts accounted for 27% of its £7.5bn turnover in 2011. In the UK, it runs six British prisons, operates prisoner tagging schemes, helps to run the Government Communications Headquarters (GCHQ) and provides back office roles to the health and education sectors.

G4S was appointed official security services provider for the London 2012 Olympic and Paralympic Games in 2011.

This year, the Lincolnshire Police Authority awarded G4S the first contract in the UK to build, design and staff a police station.

It also dabbles in a range of extra-curricular activities: it significantly expanded its corporate social responsibility strategy in the last five years and is a leading supporter of the British sailing team competing in the Olympics.

Who is in charge at G4S?

Nick Buckles has been the group chief executive of G4S since July 2005. He took home £5.3m last year, despite giving up his bonus after the company failed in a costly bid to take over cleaning giant ISS. The son of a dinner lady and a policeman, Buckles was lured into a graduate scheme at Securicor - which later merged into G4S - by the offer of a company Ford Escort.

According to The Daily Telegraph, he is a marathon-running West Ham fan whose favourite film is Sexy Beast, but admits: "I can't say I have ever read a book." In 2010 he said he had never wanted to work for anyone other than G4S.

Has G4S always been this controversial?

In the early 1990s, several prisoners escaped while being transported by G4S predecessor Group 4. In 2010, the company received hundreds of complaints from illegal immigrants held in G4S detention centres, including allegations of assault and racism. G4S insisted that the level of substantiated complaints was extremely low and they were of a minor nature.

Later that year, Angolan detainee Jimmy Mubenga died after being restrained by G4S guards, three of whom were arrested on suspicion of manslaughter. They are currently on bail.

In October 2011, inmates in Birmingham Prison, which is managed by G4S, were locked in their cells for almost a day after a set of keys fitting every cell door went missing. In another incident in August 2011, G4S staff attached an electronic monitoring tag to the false leg of a one-legged criminal, meaning he was able to go out and leave it at home. G4S sacked the two members of staff responsible.

Has the Olympics fiasco affected G4S shares?

G4S shares have fallen by as much as 4% since the news of its Olympic contract troubles emerged. However, Caroline De La Soeujeole, an analyst at Seymour Pierce who covers G4S, told the BBC: "The share price reaction is overblown as the Olympics contract is a relatively small part of G4S's revenues. I don't think profits at the year-end will be significantly affected by this news." 

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