A top executive at Barratt Developments has been arrested this morning along with another former employee of the housebuilder.
Barratt said today that it had referred regional director Alastair Baird to the Metropolitan Police in April for possible misconduct in awarding supply contracts.
The referral followed an internal investigation by the company that also resulted in civil legal action against an employee in October 2015, who was then sacked in February this year.
Barrat said that it subsequently employed an accounting firm to take on an external review of the controls on its tendering and procurement processes in London, which lead to the company putting in additional controls.
The company added that it doesn't expect the scandal to hit its finances and Gary Ennis, managing director for the Southern Region, has taken over from Baird temporarily.
Baird is praised on Barratt's website for hits "enviable reputation" and his "superb relationships with key public and private sector stakeholders".
Barratt's chief executive David Thomas said: "We are committed to meeting the highest ethical standards in all aspects of our business. We have acted decisively, launching our own thorough and comprehensive investigation and referring the matter to the Metropolitan Police.
"I am confident that Gary Ennis and the London board will ensure that Barratt London continues to deliver successfully and remains a trusted, valued partner to its stakeholders.
"We will continue to cooperate fully with the Metropolitan Police and to conduct our own investigation into these matters."