| LONDON, July 16
LONDON, July 16 Running care homes and prisons,
fighting pirates and mystery shopping, G4S was long in the
background of many people's lives before its London Olympics
debacle put the company in the middle of a media and political
The G4S group is made up of a list of businesses that spans
five continents and employs more than 657,000 staff, making it
the world's second largest private sector employer behind U.S.
retailer Wal-Mart and the world's biggest security
But with size doesn't always come profile and so the British
group, which made revenues of 7.5 billion pounds ($12 billion)
in 2011, targeted London's Olympics as a flagship security deal
that would put it on the map and help win new work at home and
What it got instead was a major headache after admitting it
could not provide 10,400 venue guards it had been contracted to
deliver, costing the firm up to 50 million pounds ($80 million)
and forcing the British government to call up 3,500 extra troops
The hostile headlines, made worse by Prime Minister David
Cameron calling for G4S to face the consequences, have been a
harsh wake-up call for a company that has been an active part of
most people's lives for much longer than they realise.
In its core British market, the firm with the slogan
"securing your world" has a hand in everything from airport
security and immigration, to running prisons, police forces and
cleaning and catering in schools and hospitals.
The group also trains British troops before deployment,
handles the administration of penalty train fares, installs
residential smart energy meters, runs children's homes and
manages cash transportation for banks and retailers.
Around the world it protects embassies, manages more than
40,000 electronically tagged offenders, guards ports and
airports as well as nuclear, oil, gas and mining sites, and even
protects container ships from pirates off Africa and Malaysia.
Staff range from spotty teenagers directing crowds at events
such as Wimbledon to former SAS soldiers and police specialists
able to construct anti-kidnapping strategies or assist local
Government contracts amount to over half of the company's
British revenue and the market makes up over 20 percent of its
bid pipeline, including contracts to run seven prisons that will
be awarded later this year.
Dealing in such high security areas means its work has not
been without controversy. The group, which became a global giant
in 2004 when Securicor merged with Danish company Group 4 Falck,
had had to deal with a number of prison riots and escapes before
Last year the firm left prisoners locked up for almost 24
hours at a Birmingham jail after losing the keys to cells, and
in another incident guards tagged a man's false leg, allowing
him to remove it and break a court-imposed curfew.
G4S, whose shareholders' meetings are often attended by
protest groups, faced criticism over the death in 2010 o f
Angolan deportee Jimmy Mubenga, who collapsed on a commercial
flight from London's Heathrow Airport.
The problems have more recently spread to the boardroom.
Last year G4S, which competes against rivals such as
Securitas and Serco, felt the wrath of its
investors when it caved in to pressure to scrap a planned 5.2
billion pounds ($8 billion) acquisition of Danish cleaning firm
The failed move, which required a 2 billion pound ($3
billion) rights issue and would have seen the group become even
larger with a push into the less controversial cleaning and
catering sector, cost the firm around 50 million pounds ($80
billion) in advisers' fees.
Chief Executive Nick Buckles, admired internally for his
wide knowledge of every part of the business, had his strong
credibility to thank for not losing his job, but some have
warned his 27-year stay may not last much longer following the
Buckles' damage control efforts began at the weekend with a
series of media interviews but had little effect on Monday, when
G4S shares fell 9 percent on the London Stock Exchange.
While the weeks ahead will be a nervous time for Buckles,
the blame may also fall on senior UK events management figures
such as Mark Hamilton - who has worked as a bodyguard to Paul
McCartney - and Ian Horseman Sewell, who just 10 days ago told
Reuters G4S was confident it could run the Olympics Games and
another similar-sized event elsewhere at the same time.
On Tuesday Buckles will face a British parliamentary
committee hearing to explain the Olympics fiasco - a meeting
that could have some effect on the firm's ability to win new
work in the crucial government sector.
Analyst Kevin Lapwood at stockbrokers Seymour Pierce said
the repercussions for G4S will be short-lived, but not so for
"What next? It appears certain that CEO Nick Buckles will
fall on the sword along with other senior UK management. Whoever
is in charge will have a lot of work to do to repair the