UPDATE 2-Passport maker De La Rue flies in turnaround specialist

* Turnaround specialist Clive Vacher named new CEO

* Company has suffered multiple setbacks

* De La Rue realigning operations
(Recasts, adds detail, analyst, share price)

By Tanishaa Nadkar and Pushkala Aripaka

Oct 7 (Reuters) - De La Rue has appointed
turnaround specialist Clive Vacher as chief executive as the
banknote and passport maker contends with a series of setbacks.

Vacher takes over immediately from Martin Sutherland, whose
departure was announced after a May profit warning, but faces
significant challenges alongside new chairman Kevin
Loosemore.

De La Rue's share price has more than halved since the
profit warning, with the company also taking a one-off hit for
non-payment from Venezuela and an investigation led by Britain's
Serious Fraud Office (SFO).

Vacher was previously CEO at semiconductor business Dynex
Power and has held senior positions with industrials Pratt &
Whitney, Rolls-Royce and General Dynamics.
De La Rue is emphasising Vacher's credentials in business
transformation and operational turnarounds, which may prick up
the ears of all shareholders, said Russ Mould of investment
broker AJ Bell, referring in particular to activist investor
Crystal Amber Fund.

The fund owns a little more than 6% of De La Rue and last
month said the company suffered from a lack of strong and
knowledgeable leadership.

Crystal Amber did not respond immediately to a request for
comment.

Shares in De La Rue were up 2.7% at 230 pence by 0955 GMT.

De La Rue did not disclose Vacher's remuneration but
predecessor Sutherland's package for the year to March 30 was
close to 1 million pounds ($1.23 million), the company's latest
annual report https://cdn2.hubspot.net/hubfs/2752422/ar2019/Annual%20Report%202019%20indexed/DLRAR19_19_Rem_report.pdf
shows.

London-listed De La Rue, which produces passports for 40
countries, has designed about a third of the world's banknotes
in circulation and is the world's largest commercial printer of
passports.

The SFO opened a criminal investigation into the company in
July over "suspected corruption" in its business in South Sudan,
where De La Rue has designed and printed all new currency since
the country's secession from the north in 2011.

De La Rue has said it is cooperating with the SFO
investigation.

The company's woes have been compounded by the loss https://www.reuters.com/article/us-britain-eu-passport/british-firm-de-la-rue-to-challenge-government-on-passport-contract-idUSKCN1H91WT
of its 400 million pound contract to produce Britain's
passports ahead of the country's planned exit from the European
Union.

To counter weakness in its traditional businesses, De La Rue
has been shifting to new areas and it recently secured a
contract with the UK tax authority and Saudi Arabia.

The company is also realigning operations to focus on its
Currency and Authentication divisions.

"It also needs to prove that it has a strategy that leaves
it well-positioned to cope with a world where cash is being used
less and less," AJ Bell's Mould said.
($1 = 0.8130 pounds)
(Reporting by Tanishaa Nadkar and Pushkala Aripaka in Bengaluru
Editing by Bernard Orr and David Goodman)