A UK engineering group has said it was investigating a suspected fraud involving £10 million (€14.7 million) in possible unauthorised payments.

Charter, which is the London-based holding company for three businesses employing almost 10,000 people worldwide, said it was in the early stages of investigation.

The suspected fraud is thought to involve one employee. Police have been informed, a Charter spokeswoman added.

Shares in Charter, which had a market value of £264 million at the start of trading today, fell more than 10 per cent following the announcement.

In the statement, Charter said early indications suggested a series of payments totalling around £10 million may have been made.

The statement also added that a detailed review of each payment had yet to be completed.

The company announced in the statement: "Charter is investigating evidence that an employee may have been involved in fraud against the group.

"Investigations are at a preliminary stage and the precise nature and quantum of the suspected fraud, which appears at this stage to be confirmed to a single employee, are still to be determined."

Charter said cover under its insurance policy was limited to £5 million.

The company's two main subsidiaries are a welding products company called Esab and Howden, an industrial fans and high pressure blowers business.