Police have begun an investigation into Bermuda Housing Corporation (BHC) after information was passed to them from the Director of Public Prosecutions Khamisi Tokunbo, The Royal Gazette can reveal.

Mr. Tokunbo received preliminary findings from Auditor General Larry Dennis, who is near to completing an investigation into BHC, and passed them to Police to investigate.

Detectives are now building a file on the BHC, based on information Mr. Dennis uncovered in his inquiries.

Premier Jennifer Smith appointed Mr. Dennis to conduct an investigation into BHC following allegations of huge over-payments to some contractors, claims of kickbacks and corruption, and concern about financial controls.

After the allegations surfaced in the House of Assembly in March, Premier Jennifer Smith ordered Mr. Dennis to carry out a full investigation into the running of BHC.

BHC documents later surfaced in the media showed painting contractor Paul Young earned more than $800,000 from the corporation for seven month's work last year.

Mr. Dennis has enlisted seven chartered accountants, a quantity surveyor and a painting contractor to minutely examine how BHC has been spending its money.

BHC general manager Raymonde Dill and finance manager Robert Clifford were suspended by the BHC board pending the completion of Mr. Dennis's report, although the board said these moves should not imply that either had been guilty of wrong-doing.

A Police spokesman said yesterday that Police could not comment and Mr. Dennis said he was unable to comment because his investigation is still on-going.

But The Royal Gazette has received confirmation from several reliable sources that Police have launched their inquiry into BHC.

Mr. Dennis has previously stated he is hoping to complete his investigation and present it to the House of Assembly in the middle of May.