The Serious Fraud Office has launched an investigation into Torex Retail, the stock exchange-listed UK software provider.
Along with the City of London Police, the Serious Fraud Office (SFO) raided three residential addresses earlier this week: two in Oxfordshire, where the company is headquartered, and one in Warwickshire. The raids follow a shock profits warning and suspension of the company's shares on the Alternative Investment Market (AIM) last week.
The SFO told The Guardian that it had been passed allegations of "improper activity". The London Stock Exchange said it was investigating the company's compliance with AIM market rules.
Torex Retail has admitted that payment for a number of contracts would not be made in time to meet its 2006 financial year, leaving a hole in its profits. Company debts have ballooned to £217.5m, more than the total value of the business.
Torex has acquired 12 companies since it floated on AIM in 2004, spending about £400m. The company was originally spun out of iSoft, the company at the centre of Accenture's withdrawal from the NHS's National Programme for IT. iSoft's financial affairs are being investigated by both the Financial Services Authority and the Accountancy Investigation and Disciplinary Board (AIDB). The AIDB is probing the actions of several current and former executives.
The SFO, which only investigates the nation's most serious and complex fraud issues, said in a statement on Tuesday that it had made no arrests in connection with the case.