The regional managing director for London at Barratt Developments was arrested following an ongoing probe into contract awards.

The housebuilder said this morning it has suspended Alastair Baird pending the outcome of an inquiry by the Metropolitan Police.

One other former Barratt London employee was also arrested, the firm added.

The arrests follow a referral in April 2016 by Barratt to the Metropolitan Police of initial findings of an internal investigation. The investigation commenced in August2015 following an internal audit and relates to possible misconduct in the process for awarding and managing certain material & sub-contract supply contracts in the London region.

The investigation also led to civil legal action which commenced in October 2015 against an employee who was dismissed in February 2016.

Following the initial findings of the internal investigation, Barratt appointed an accounting firm to conduct an external review of the controls relating to the tendering and procurement processes in the London business, the results of which were reported to the Audit Committee.

Following this review, Barratt said it has adopted additional controls. Barratt’s London procurement processes differ from wider Group processes reflecting the non-standard and one-off nature of London construction projects.

Chief executive David Thomas said: “We have acted decisively, launching our own thorough and comprehensive investigation and referring the matter to the Metropolitan Police.”

He added: “We will continue to co-operate fully with the Metropolitan Police and to conduct our own investigation into these matters.

“We will take whatever action is required to ensure our values and standards are upheld.”

Gary Ennis, regional managing director for Southern Region, will take interim responsibility for the London and Southern Regions, supported by the London Board and other senior management of the Group

Barratt said it did not expect a material financial hit to arise from the misconduct inquiry.