Impellam Group  has launched an investigation into one of its subsidiaries, and raised concerns that its earnings before tax have been overstated by a total of £5m in 2008 and in previous years.

The company says the investigation into the recovery of billed and unbilled receivables within its wholly owned subsidiary, Recruit Events Services, is “on-going” and is anticipated to take at least another four weeks to conclude.

The statement to the Stock Exchange continues: “Accounting records are in the process of being re-created and it is currently expected that the group’s pro forma earnings before tax has been overstated by up to a total of £5m across 2008 and prior years.

“It is therefore anticipated that the group’s pro forma earnings before tax in 2008 will be materially below market expectations and that a material adjustment will need to be made to the group’s pro forma earnings before tax in 2007. An update on the investigation will be provided in due course.”

The group’s preliminary results for the period ended 31 December 2008 will not be announced until the investigation is complete.