Ultra sinking after SFO probe into Algeria corruption claims

Corruption claims in Algeria torpedoed shares in submarine warfare firm Ultra Electronics on Thursday in yet another blow for the beleaguered company.

The shares sank nearly 8%, or 103p, to 1285p as Ultra admitted it was the subject of a criminal investigation by the Serious Fraud Office.

The focus of its probe, which was uncovered and reported to the SFO by the company itself, is “suspected corruption in the conduct of business in Algeria by Ultra, its subsidiaries, employees and associated persons”.

Due to the early stage of the SFO investigation Ultra said it was “not possible to estimate reliably” the potential impact. The corruption probe comes after a nightmare run for the company, which sacked its chief executive Rakesh Sharma last year and cited squeezed defence budgets for a major profits warning.

Ultra appointed Simon Pryce, the former boss of BBA Aviation, as its chief executive last month on a potential £2.7 million package.

Ultra has little presence in Algeria. Alongside defence, Ultra works in cyber-security and provides sensors used in nuclear reactors as well as IT in airport security. It is understood that Ultra's sales in Algeria were less than £400,000 last year, related to “support services contracts in the civil arena”, whereby Ultra’s products were sold in the country via a third party. The SFO declined to comment.