Tricky one this. If you decide to come clean the company will take it one of two ways. Either they will be annoyed at what they deem interference in their recruitment process, or (and I consider this is more likely) they will welcome some insider knowledge of an individual.
The last two organizations I have worked for both sought advice from previous colleagues of an interviewee. One, it was highly unlikely that you would get an interview without a mate submitting your CV. They company were reasonably open about this but of course it wasn't official policy. They could justify it by pointing out that as a long haul airline recruiting experienced pilots, an applicants ability was not in question but as a long haul operator, CRM and personalities are a major factor. Would you want to choke the death out of the guy on the approach after having to sit next to him for 9 hours? When I applied for this airline (which required names of people you knew in the company on the application form) two of may mates were called for their opinions!
The second company are less open about their recruitment policy, but still it exists and I have been surreptitiously asked what I tough of an applicant.
It sounds like your company has made a choice with you based on what it has seen. Only you will know whether it will will welcome advice, but by shopping him you will prevent having to work with him and the company would be better off without him. May I suggest that you and your other colleagues make an approach to the company and mention that you know this charactor and would find it hard to work with him. This should set off enough alarm bells to make them re-consider.