In a statement the SFO said the Department of Trade and Industry had passed it a report on the irregularities.
Corporate Services Group is the parent company to employment agency Blue Arrow and was an unsuccessful takeover target of Conservative Party Sir Michael Ashcroft.
The investigation relates to the accounting years 1997 and 1998. CSG said that the investigation involved historic accounting practices under the previous management, which preceded a radical reorganisation of the board in the spring of 1999, including the appointment of new chief executive Peter Owen.
Irregularities came to light after the arrival of a new finance director, David Lake in November 1998. Prior to the boardroom shake-up the company had issued a number of profit warnings.
In a statement CSG said: ‘The directors wish to make it clear that the Department of Trade and Industry report which prompted the inquiry relates to historic accounting practices, under previous management.’
Ernst & Young was appointed external auditor in December 1999, replacing previous auditor Arthur Andersen whose staff are likely to be interviewed by the SFO.
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