The UK's markets regulator has launched an investigation into Drax over compliance with listing rules following allegations from a former senior executive.
The FTSE 250 group said on Thursday it had been notified by the Financial Conduct Authority (FCA) that the probe would examine the period from January 2022 to March 2024.
The FCA will also review the company’s annual reports for the 2021, 2022 and 2023 financial years, assessing their compliance with listing and disclosure rules.
Drax, which runs the UK’s largest renewable power station in Yorkshire, said it would cooperate fully with the investigation.
The FCA’s move follows claims made at an employment tribunal in March, when Drax’s former top lobbyist accused the company of misleading the public, government and regulators over the sourcing of wood for its biomass pellets.
The controversy comes as ministers weigh the future of biomass subsidies. Earlier this year, the government confirmed support for Drax’s flagship power plant would continue beyond 2027, when current arrangements expire.
Shares in Drax are likely to come under pressure today as investors assess the potential reputational and regulatory risks stemming from the FCA’s intervention.