Fraud squad police execute search warrant on Sydney-based auditing firm to seize ALS Newcastle lab documents in international fake coal testing investigation

It's understood police executed a search warrant at McGrathNichol's offices last month seeking information about testing giant ALS's Maitland and Mackay labs.

McGrathNichol was employed by ALS to conduct a forensic investigation into claims coal test results were being changed to increase the value of Australian coal shipments.

The independent investigation found approximately 45 to 50 per cent of coal tests were "manually amended" dating back to 2007 by ALS's Australian Coal Superintending and Certification Unit, headquartered in the Hunter, to make it appear coal was better quality.

ALS reported the matter to NSW Police in April and a search warrant was executed for additional information, that was supplied in electronic form, last month.

A spokesman for the State Crime Command said the investigation was being led by the Australian Securities and Investigation Commission (ASIC).

ALS said on Tuesday that it would continue to cooperate with "any requests for support" from police and ASIC.

"ALS took action as soon as it became aware of allegations that coal certificates were being amended without justification and the practice has stopped," a spokesman said.

"Stringent additional controls are now in place, and other process improvements to control issuance of certificates are nearing completion."

It is alleged the test results were changed so the coal appeared to give off more energy than it actually did, making it more valuable.

ALS stood down 2300 of its 15,000-strong global workforce last month as it moved to protect its balance sheet from the scandal and the COVID-19 pandemic.

It's understood the testing giant has been banned from working on some coal shipments after being placed on a foreign blacklist following the coal-testing scandal.

Industry insiders told the Newcastle Herald there was "immense pressure" on labs to alter test results and it was an "open secret" in the Hunter Valley coal industry.

Lab operators risked losing lucrative shipping and train contracts if they "do not play ball".

Three of the four people initially suspended, who have since left ALS amid the scandal, were based at Newcastle.

An ASIC spokeswoman said the regulator was unable to comment.

While you're with us, did you know the Newcastle Herald offers breaking news alerts, daily email newsletters and more? Keep up to date with all the local news - sign up here

IN THE NEWS: