Tata Steel, UK's largest steelmaker, which has offered itself for sale, is also reported to have referred itself to investigations after an internal inquiry at its Yorkshire site in northern England revealed that some of its staff may have faked certificates on product quality.
The report comes after the steelmaker announced plans to sell its UK operations and shut down its plants unless a buyer was found.
The Telegraph on Thursday reported that UK's Serious Fraud Office has initiated a criminal investigation into Tata Steel's operations.
Police are investigating charges that Tata Steel's staff in and around its Yorkshire's site, may have faked certificates on the composition of the products before its sale, the newspaper said.
The company's auditors are also believed to have suggested possible inappropriate testing and certification of steel before they were sold.
Trading standards are also under investigation, the report said, adding it was unknown if they were linked to the same allegations.
At least nine staffers at Tata Steel's Yorkshire's site are believed to have been suspended pending investigation.
The documents examined so far have revealed that the falsification of certification might have affected 500 customers, including BAE and Rolls-Royce, The Telegraph said, citing a source.
Rolls-Royce is reported to have said it was aware of the probe. "We were made aware of an issue by Tata last year…We have not been contacted by the SFO and cannot comment on any investigation," the report quoted the company as saying.
Tata Steel, the biggest steel producer in Britain, has put its UK businesses up for sale due to high costs, weak demand and a flood of cheap imports from China.
The British government, which was slow to respond to the crisis, has opened talks with potential buyers for Tata Steel's UK operations, including UK-based investment firm Greybull Capital and Indian origin Sanjeev Gupta 's Liberty House (See: Liberty House boss Sanjiv Gupta in talks to buy Tata Steel ).