ALS has appointed external parties to conduct an independent, forensic investigation into the processes applied to the certification of coal samples by staff employed in the coal superintending and certification unit within the ALS Coal business stream.
According to a report in the Australian Financial Review, a former commercial general manager at Terracom started litigation alleging his old company and ALS were involved in such a scheme.
The proceedings would be "vigorously" defended by Terracom, its law firm Ashurst told the AFR.
Four staff members of ALS' coal superintending unit have been suspended pending the
outcome of the ongoing investigation.
ALS processes more than 40 million samples per year. The coal superintending unit processes more than 39,000 samples for shipping analysis which equates to approximately 3000 certificates of analysis per year.
According to ALS the unit accounted for less than 3% of ALS Group underlying earnings before interest and tax in the financial year ended March 31 2019.
"ALS has put immediate measures in place to stop the amendment of certificates without
proper justification, and additional review processes are being put in place within the coal
superintending unit to ensure the integrity of certificates of analysis," it said.
"Different methods of verification are carried out in other parts of the ALS Group and are tightly controlled by automated processes and management systems, limiting the ability to amend certificates of analysis in this manner.
"ALS has commissioned an additional independent review of certification and reporting processes across all divisions of the group."
According to ALS, preliminary findings indicate the issues being investigated are isolated to the coal superintending unit and have not identified any evidence of similar practices in other divisions.
ALS CEO Raj Naran said integrity and ethical conduct were critical to the company's business.
"Investigations to date indicate that these incidents are isolated to the coal superintending unit but they do not meet the standards of behaviour we expect from our staff," he said.
"We have acted quickly as soon as these issues were identified, to deal with them and put additional processes in place to ensure they cannot happen again."