Transline, the temporary employment agency that became embroiled in the Sports Direct scandal, has submitted court documents preparing the company for insolvency.

The business has filed a “notice of intention of appointing administrators” at a court in Leeds, and has sounded out the accountancy firm Deloitte as a potential administrator.

The “notice of intention to appointment” is a device to give notice to secured creditors that there is a chance or prospect of an administration process. It also creates a moratorium around the business from action by creditors for 10 working days.

The move comes after Transline was one of two employment agencies exposed by a 2015 Guardian investigation of paying temporary workers at Sports Direct’s Shirebrook warehouse less than the national minimum wage.

It also follows the firm being axed last month from supplying temporary warehousing staff to the world’s largest retailer Amazon, and comes two weeks after the company announced that Colin Beasley – who was the majority shareholder when the group founded - had left its board.

A Transline spokesperson said: “The company has suffered as a result of a continued move to tighter margins in the recruitment industry. We are close to securing inward investment that will allow us to drive forward with continued growth and infrastructure development, and have lodged the ‘notice of intention’ to protect the business, our employees and our customers as we complete this process.

“The welfare of our staff and our relationships with our customers are of paramount importance, and we are continuing our service and operations as normal. We expect to hear more regarding potential trading investments imminently.”

The comment appeared to be a direct contradiction of a statement made by the company on 28 March when, having been asked about the company’s finances, a Transline spokesperson told the Guardian: “There is no imminent need for funds within the business, but we are committed to building the scale and size of our company, whilst ensuring the well-being of all our employees is a driving force in our work.”

The employment agency has had a torrid 16 months since the publication of the Guardian’s investigation into working conditions at Sports Direct, which resulted in a deal where the retailer, Transline and a second agency, The Best Connection, agreed to make about £1m available in back pay to affected workers.

However, it emerged at a parliamentary select committee hearing last month that Transline has failed to honour part of that deal, leaving scores of workers who were paid less than the legal minimum without the back pay they are owed for their shifts.

The payments were to be backdated to May 2012, although Transline has not yet refunded unpaid wages from before it took over workers at the site from a rival agency, Blue Arrow, in 2014.

The March parliamentary hearing was the second time Transline had been called to appear in front of MPs in less than a year, with the first hearing ending disastrously for the company when its finance director, Jennifer Hardy, was accused of misleading parliament.

Her evidence provoked Iain Wright, Labour MP and chair of the House of Commons business, innovation and skills select committee, to call on Sports Direct’s founder and majority shareholder, Mike Ashley, to consider axing Transline, which he said had not been candid about the reasons for its lack of an operating licence from the Gangmasters Licensing Authority, an industry watchdog.

Transline denied it had misled MPs.

Steve Turner, assistant general secretary of the union Unite, said: “The current uncertainty surrounding Transline’s future is yet more evidence of the need for Sports Direct to wean itself off its over reliance on temporary agency workers at its Shirebrook warehouse. Sports Direct must urgently move to put agency workers onto permanent contracts to bring security to the workforce and certainty to the business.

“Transline must not be allowed to dodge its responsibilities or the back pay it owes for non-payment of the minimum wage at Sports Direct. It must continue to pay the wages of the tens of thousands of low paid agency workers it currently employs across the UK. A failure to do so would be the final insult for the many workers it has exploited through its draconian work practices.”

Deloitte and Sports Direct declined to comment.