* Hundreds of millions of dollars in business suspended with Inchcape Shipping
* Navy cites questionable conduct in taking action
* Move comes amid corruption probe of Glenn Defense Marine Asia
WASHINGTON, Nov 27 (Reuters) - The Navy said on Wednesday it has suspended a maritime services company from doing business with the U.S. government due to questionable conduct, the second firm barred in a widening corruption probe that has resulted in action against seven Navy officials.
The Navy suspended British-based Inchcape Shipping Services Holding Ltd. and its affiliated companies from contracting with the U.S. government on Nov. 26, Rear Admiral John Kirby, a Navy spokesman, said in a statement.
The Navy move affects contracts with Inchcape Shipping Services that potentially were worth some $243 million for maritime services, mainly in the Middle East, Italy and Singapore, a Navy official said.
Kirby said the Navy suspended Inchcape Shipping Services based on "evidence of conduct indicating questionable business integrity." He did not elaborate on the nature of the questionable conduct and did not indicate whether the firm was under any further investigation.
Another Navy official said Inchcape was suspended for failing to report credible evidence of significant contract overpayments, committing an offense indicating "a lack of business integrity or honesty" and conduct so serious it affected the firm's ability to be a government contractor.
Inchcape Shipping had contracts to help arrange repairs and other services when U.S. Navy vessels made port visits overseas. Kirby said the suspension was part of an effort by Navy Secretary Ray Mabus to ensure contractors are "fully compliant with contracting regulations and procedures."
Efforts to reach Inchcape Shipping Services were not successful. No phone numbers are listed on its website, and the company did not immediately respond to a request for comment submitted through the site.
The suspension came in the midst of a corruption investigation into the business practices of Singapore-based Glenn Defense Marine Asia and its chief executive Leonard Glenn Francis, who was arrested in September and charged with bribing Navy officials to win business.
Six Navy officers and a Navy investigator have faced action in connection with the probe, including two commanders and an investigator who were charged in the bribery conspiracy. Francis is accused of giving them luxury travel, tickets, prostitutes or cash for information helping him to secure government business.
The most senior officers touched by the probe so far are Vice Admiral Ted Branch, the director of Naval Intelligence, and Rear Admiral Bruce Loveless, the director of Intelligence Operations.
Their access to classified information was suspended earlier this month and they were put on temporary leave due to allegations of "inappropriate conduct." No charges have been filed against them or against two other officers who were reassigned or relieved of command.
The Navy suspended contracts with Glenn Defense Marine Asia, which were potentially worth hundreds of millions of dollars.
Francis, a 49-year-old Malaysian businessman, was arrested in San Diego on Sept. 16. A federal magistrate granted him $1 million bail last week but stayed her ruling pending a review by another judge, leaving him in jail for the time being.
(Reporting by David Alexander; Editing by Ken Wills)