Two senior managers have been suspended at Alfred McAlpine subsidiary Slate following the uncovering of suspected accounting irregularities.
The construction group says that the fraud could cost it £13 million in full-year profits.
In a statement today Alfred McAlpine said that an internal investigation has revealed "systematic misrepresentation" of production volumes and sales.
"The board believes that the behaviour and collusion of the managers responsible has been entirely deliberate and involves the possibility of fraud," the firm said, adding that senior company figures at Slate had sought to cover their tracks by selling slate at discounted prices.
Slate is one of the leading suppliers of the building material in Britain, with Buckingham Palace and the Welsh Assembly among its clients.
Alfred McAlpine added that it had hired a team of independent accountants to conduct a detailed forensic analysis.
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