The former operator of the Southeastern rail franchise has been fined £23.5m after the government found it “deliberately concealed” £25m of funding that should have been returned to the taxpayer.

In addition to the penalty announced by the Department for Transport (DfT), the government is recovering £64m from London & Southeastern Railway (LSER) that is owed over the scandal.

LSER – a joint venture 65% owned by UK-listed Go-Ahead group and 35% by France’s Keolis – was stripped of the franchise last autumn after the scandal was uncovered.

That was after a review identified the concealment of money overpaid under franchise arrangements that should have been repaid, between October 2014 and March 2020.

It also found evidence of similar behaviour by LSER during its previous franchise agreement from April 2006 to October 2014.

Transport secretary Grant Shapps said it was an “appalling breach of trust”.

“LSER’s behaviour was simply unacceptable and this penalty sends a clear message that the government, and taxpayers, will not stand for it,” Mr Shapps added.

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The Southeastern network covers London, Kent and parts of East Sussex.

The £64m being recovered by the DfT on top of the fine relates to breaches of the franchise agreement plus “other balances identified, adjustments to profit share payments and interest owed”, it said.

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Despite losing the Southeastern franchise, Go-Ahead and Keolis’s Govia joint venture continues to operate Govia Thameslink Railway – Britain’s largest railway franchise, consisting of Southern, Thameslink, Great Northern and Gatwick Express services.

The scandal resulted in Go-Ahead temporarily suspending its shares as it was forced to delay publication of annual results as it scrambled to calculate its financial impact.

Last month it said it was setting aside £30m to cover the potential penalty.

A Go-Ahead spokesman said: “We accept this penalty.

“Since these events came to light, our corporate governance procedures have been enhanced and the group is under new leadership.”

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