Downer EDI is investigating whether fraud is the cause of a $40 million profit restatement on a maintenance contract for a power client after disclosure of the “accounting irregularity” wiped more than half a billion dollars off its market capitalisation.

The services group’s shares tumbled 98¢, or 20 per cent, on Thursday, to close at $3.82 – their lowest level in more than two years – as chief executive Grant Fenn tried to reassure investors the accounting issue was not systemic.