Compass Group PLC, the world's largest catering company, said on Friday it has suspended two executives while it investigates a contract between one of its subsidiaries and the UN.
Compass said it has hired law firm Freshfields Bruckhaus Deringer to investigate the relationship between Compass subsidiary Eurest Support Services, the UN, and IHC Services Inc, a former contractor to the UN contract procurement department.
The company said that Peter Harris -- Compass chief executive for UK and Ireland, the Middle East and Africa -- and Andy Siewert, Eurest's business development executive, were both suspended as of Friday. Neither has commented.
Compass shares were down 5.79 percent to ?1.75 (US$3.09) at close of business on Friday.
Barclays analyst Sebastien Petit said the suspensions and investigation were a "significant blow" for the company.
"The potential UN fine is a wild guess but the reputational damage is likely to be important, especially for government contracts, which represent about 15 percent of the group revenues," Petit said.
The UN said on Friday that it has suspended Eurest as a registered UN vendor while it investigates allegations that Eurest "improperly" obtained internal UN documents that helped it outbid competitors for a US$62 million contract to supply food and water to UN peacekeepers in Liberia.
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