A major inquiry has been launched in the wake of a property in Birmingham being allegedly over-valued to the tune of #10 million.

Detectives from West Midlands Police have joined forces with the Serious Fraud Office to investigate a sting which is said to have hit the Cheshire Building Society.

The inquiry - which has spread beyond the Midlands - centres on a site in Aston which was allegedly given an inflated value in a bid to land finance.

Today shareholders at the Cheshire are hoping to hear what cash might be clawed back as the Society stages its annual meeting.

The Birmingham Post has learned that West Midlands Police's Economic Crime Unit received a complaint about the alleged fraud against the Society.

Detectives investigated the claim and passed the issue on to the London-based SFO when it became apparent there were wider matters to investigate.

The SFO is now leading the investigation in conjunction with West Midlands officers and the Financial Services Authority is also investigating.

An FSA spokesman said the alleged scam inflated the value of an Aston industrial property from #1 million to #11 million.

During March it is understood police arrested and released a man, said to be Ian McGarry, without charge in connection with the fraud. Mr McGarry, a senior valuer in the London office of Dunlop Haywards, has been suspended while an internal inquiry is carried out by the company.

Dunlop Haywards' parent company the Erinaceous Group holds its annual meeting tomorrow. Shareholders are expected to quiz directors about the issue.

An SFA spokesman said the technique for the alleged scam was "essentially simple".

It works by the worth of the property being exagerated in a bid to use the boosted price to falsely gain finance from a lender. Two, three or more parties possibly including a Birmingham property company may be involved, it is understood.

The spokesman said it was thought that the Cheshire suffered because it did not get a further, independent, valuation.

He said: "A closer look at the property would have shown it to be worth nothing like the valuation provided."

A spokeswoman for the Cheshire said the society expected to claw back a substantial amount of money as it had a "strong case against our professional advisors". She would not comment further.

West Midlands Police's Economic Crime Unit also declined to comment and an SFO spokesman would only say the case had "spread beyond the West Midlands".