Asylum seekers on Manus Photo: supplied
It comes after the Sydney Morning Herald reported the politically connected NKW Holdings was suspected of inflating invoices to turn profits.
The Auditor-General, Grant Hehir, will investigate the Australian government contract NKW was given to feed and house asylum seekers on Manus.
In a letter on Monday obtained by the Australian Financial Review, he said he would also investigate $US300 million in contracts awarded to Paladin.
In February, the Australian private security company caused a political crisis in PNG after reports revealing potential fraud.
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