London-based geotechnical contracting giant Keller Group's profits from its Australia business unit may have been fraudulently inflated by the U.S. equivalent of as much as $20 million in today’s dollars since 2019, the company has revealed.

The firm also said it has fired two executives after discovering the financial reporting fraud.

Keller announced Jan. 9 that it is undergoing an internal investigation and is in the process of appointing an external advisor to perform an independent probe into the fraud. The company estimates that operating profit was inflated by about $7.3 million in the first half of 2022, and between $9.8 million and $12.2 million in prior years. 

Keller described it as "an apparently deliberate and sophisticated financial reporting fraud.”

The Australian business, which is part of Keller’s Asia-Pacific, Middle East and Africa division, accounts for about 3% of its revenue, the company said. The unit is the only one in the company that exclusively accounts for revenue on a percentage-of-completion basis, Keller notes in its announcement. It did not indlcate fraud issues in other company units.

The company “responded swiftly and decisively to a serious issue within one of our business units,” CEO Michael Speakman said in a statement. “The board and management team has taken, and will continue to take, all actions we think appropriate to ensure the maintenance of both high ethical and professional standards and resilient and effective controls throughout our organization.”

A spokesperson for the company declined to provide any additional details, including the identities and positions of the executives terminated. Keller says it will share more information about the situation when it announces its 2022 financial results on March 7. 

Keller says it is the world’s largest geotechnical specialist contractor. Its Hanover, Mass.-based North America division tops the excavation and foundation category on ENR’s Top 600 Specialty Contractors list. It ranks No. 13 on the list overall, reporting $1.82 billion in 2021 revenue.

In an update, the company says its North America division “continued with a high level of activity” over the past year. Management decisions helped Keller North America overcome challenges related to inflation and supply chain issues for its foundations business, according to the update.