The board of Altron [JSE:AEL] advised shareholders on Friday that three senior executives of its subsidiary Altron Nexus have been placed on pre-cautionary suspension.
This follows an investigation that has revealed potential internal irregularities.
The preliminary findings have revealed potential deviation from procurement processes involving an estimated R23m. It also involves early profit recognition of approximately R20m in the 2018 financial year.
According to the Altron Nexus website, it provides "seamless and streamline cost-effective telecommunications network building".
After receiving information from a whistle-blower in June 2018, Altron appointed independent investigators to look into alleged procurement irregularities among a few senior executives within Altron Nexus.
The investigation found no evidence of irregularities, but made recommendations on procurement process improvements and reporting obligations, which were implemented.
In June this year Altron received a second tip-off from a whistle-blower on similar allegations. The company again initiated investigations, including the appointment of a forensic services company, Naledi Advisory Services.
Altron emphasised that it views the allegations in a serious light. It said the investigation is in line with the Altron group's zero-tolerance to unethical conduct, despite the amounts not being material to Altron's financial position.
As part of the due process being followed the three executives may go through a disciplinary hearing, overseen by an independent chair.
While the investigation is on-going, plans have been put in place to ensure business continuity at Altron Nexus.
Further information will be made available in due course.