One of the UK’s oldest engineering companies faces an investigation by the US Department of Justice (DoJ) after uncovering a potential multimillion-pound kickback scandal at a Californian-based subsidiary.

IMI, which dates back to 1862, said it believed a number of third-party sales agents appointed by its Severe Service business had been offering bribes to potential customers across Asia and the Middle East.

The company suspended a number of senior staff yesterday, fearing they had “condoned the activity”.

The DoJ and Britain’s Serious Organised Crime Agency have been notified.

A team of forensic accountants from Ernst & Young will lead an independent investigation. It will centre on £20 million of payments to sales agents over the past six years.

Shares in IMI, which makes valves and fluid and climate controls for heavy industry, plunged nearly 9 per cent, or 50p, to 517.5p, the stock’s lowest level since March.

IMI’s Severe Service business caters for customers in the petrochemical and oil and gas industries and generates a fifth of the group’s annual £1.5 billion turnover. It typically pays out £3 million to £4 million a year in commission to third-party agents, who bring in about £60 million of orders.

An IMI spokesman said the group would cooperate fully with any inquiry by the DoJ, which recently hit British Airways with a £150 million fine for price-fixing. “We were initially suspicious of a payment uncovered through our normal procedures. This led us to begin an investigation,” he said.

“At the time it looked like a small, local matter but as the investigation continued more information came to light,” he added. “We have made a number of suspensions, some of which may turn out to be precautionary. There’s also always the possibility they will implicate other people.”

One European-based IMI sales agent yesterday said he knew nothing about the scandal: “That shows you something about the top-down communication in this company.”

Goldman Sachs said it believed that IMI would face a bill of only £10 million, including any fine and legal costs. “IMI’s action in communicating its initial findings to the relevant authorities should limit the size of any potential penalties that might arise,” it said.

IMI, or Imperial Metal Industries, was one of the four founders of ICI in 1927. Its history dates back to 1862, when George Kynoch opened a percussion cap factory in Birmingham. He soon diversified into ammunition, brass, printing and zip fasteners.

The company was floated by ICI in 1966 and became fully independent 12 years later.

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