Impellam Group PLC announced today it began an investigation of a subsidiary and said its earnings before tax appear to have been overstated by up to GBP5.0 million (US$7.2 million) in 2008 and prior years. The United Kingdom-based staffing firm, which also has operations in the U.S., said the investigation includes billed and unbilled receivables at its Recruit Events Services Ltd. subsidiary.

The GBP5.0 million is on a pro forma basis. Impellam Group formed in May 2008 with the merger of The Corporate Services Group PLC and the Carlisle Group Ltd.

Impellam said the probe will take at least another four weeks, and it won't release financial results for full-year 2008 until the investigation is done. However, the company expects 2008 earnings before tax will be materially below market expectations, and that earnings before tax for 2007 will also need to be adjusted.

Recruit Events Services provides event staffing and is based in the U.K.