The Serious Fraud Office, a department of the UK criminal justice system, has launched a preliminary inquiry into the UK operations of AIG Financial Products Corp, a subsidiary of stricken US insurance giant American International Group. Media reports say the SFO is examining suspected irregularities.

The SFO is working with US authorities - which are already conducting separate independent investigations involving conduct at AIG Financial Products Corp - and with the UK financial services regulator, the Financial Services Authority. The SFO's inquiry does not concern the insurance operations of AIG in the UK or elsewhere.

The SFO says the move is in keeping with its new approach of intervening proactively at an early stage when it is made aware of irregularities which warrant further investigation.

The director of the SFO, Richard Alderman, said: “It is right for us to look into the UK operations of AIG Financial Products Corp, to determine if there has been criminal conduct. We will use our full range of powers to seek information and to speak to those with an inside knowledge of the company's operations.”

AIG Financial Products Corp and AIG are co-operating with the SFO.

AIG, which was bailed out by the US government last year, has sold its Swiss-based private bank.