LONDON British police said on Saturday they had arrested two staff members and a former employee of an electronic-tagging service for offenders run by Capita (CPI.L) after a newspaper said criminals had allegedly paid workers to fit ankle tags too loosely.
Capita began a six-year contract to run Britain's Electronic Monitoring Service (EMS) in 2014, a deal the outsourcing firm said should generate about 400 million pounds in revenue.
Saturday's edition of The Sun said dozens of criminals were suspected of paying up to 400 pounds to security staff to fit the electronic tracking devices too loosely to their ankles, allowing them to potentially violate the terms of curfew orders.
London's Metropolitan Police said one former EMS employee and two current members of staff were arrested in January for conspiracy to pervert the course of justice and had all been bailed.
"Police had become aware that offender monitoring equipment was being used inappropriately," a spokeswoman said.
Eleven other arrests were made in January but none were current or former EMS employees, she said.
A Capita spokesman said the firm had a "zero tolerance policy" against anyone who undermined the service.
"The small number of employees being investigated regarding this localised issue were swiftly taken off duties and we are closely co-operating with the Metropolitan Police Service," he said.
The justice ministry said it was urgently investigating the matter and working closely with the police.
In December, Capita shares fell after a profit warning and the decision to sell its asset management business left investors questioning the British outsourcing group's strategy.
(Reporting by Costas Pitas; Editing by Helen Popper)