Banknote boss quits over production problems

James Hussey, who became De La Rue's chief executive in January 2009, stood down with immediate effect after telling the board that he shouldered responsibility for irregularities at a site thought to be at Overton, Hampshire.

De La Rue, which prints notes for the Bank of England and 150 other countries, said last month that certain paper quality specifications had not been met. It suspended some production and the shipment of the type of paper involved.

It has not provided further details about the irregularities but said today that it was confident that neither the physical security nor the security features incorporated in the paper were compromised for any customer.

De La Rue said: "The company continues to look into these irregularities in one of its paper production facilities, which the board considers to be of a serious nature."

It added that it may take some time to assess the financial and operational implications on the current year's financial results and prospects.

"All the other activities of the group, including currency printing remain unaffected by these irregularities."

Mr Hussey, who is 48, had been with De La Rue for 25 years, including four years as the boss of the security paper and print division at the centre of this summer's crisis.

De La Rue's shares, which fell to a three year low last month, were down another 12% today.

Analysts are fearful the problems will damage the company's reputation with central banks.

As well as banknotes, the company is a supplier of security documents such as passports, authentication labels and tax stamps. It is also a provider of cash sorting equipment to central banks.