(Adds Terracom comment, updates dateline)
MELBOURNE, May 28 (Reuters) - Australia's financial services regulator has broadened a probe into miner TerraCom (TER) and assayer ALS Ltd (ALQ) over inflating coal quality in export documentation, information provided to an Australian Senate committee showed.
The alleged fraud first came to light as part of an unfair dismissal suit lodged by a former TerraCom employee, who said the miner had worked with ALS to falsify export certification to increase the quality of its coal exports.
That sparked an internal review by ALS, one of the world's biggest laboratory service providers, which found that about half the certificates it provided for coal export samples over the past decade had been altered to improve quality.
Australia is the world's biggest coal exporter, and the scandal cast a pall over the A$28 billion ($21.69 billion) industry.
After ALS released its findings last year, South Korean utility Korea South-East Power KOSEP.UL banned ALS from certifying its coal tenders.
The investigation into TerraCom has been widened to include possible contravention of a regulation protecting whistleblowers, according to information provided by the Australian Securities Investments Commission (ASIC) to the Senate Economics Legislation Committee.
That information also showed ASIC was investigating ALS for possible criminal fraud.
TerraCom said in an exchange filing on Tuesday that it was cooperating with authorities.
ALS declined to comment but has said it terminated the employment of those involved, and has overhauled its practices.
ASIC declined to provide information around whether it was investigating any other companies as part of the probe.
The watchdog has also lengthened the period of its review for TerraCom to more than three years, starting from December 2016, and for ALS to 12-1/2 years, from an initial period of 17 months. Terracom noted that it only began exporting coal from Australia in April 2018.
ASIC searched TerraCom's offices with police assistance in March.
TerraCom, which has repayments on $200 million of debt falling due at the end of June, said in April that it was close to reaching a refinancing deal with two parties.
Terracom has operations in South Africa and Australia, where it has one mine - the Blair Athol coal mine purchased from Rio Tinto (RIO) for A$1 in 2017.
($1 = 1.2910 Australian dollars)
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