Troubled outsourcing firm Interserve has disclosed that it is being investigated by the City watchdog over how it handled the disposal of part of its business.
The group said in a stock market announcement that it had been referred to the Financial Conduct Authority’s enforcement division – sending shares 6% lower.
It said the FCA notice related to its “handling of inside information and its market disclosures in relation to its exited energy from waste business” during a period from July 2016 to February 2017.
Interserve, which is one of Britain’s biggest private sector employers with an 80,000-strong workforce, said it would co-operate fully with the investigation.
The company had announced in August 2016 that it was to dispose of its energy from waste business after earlier revealing cost overruns and delays on a Glasgow contract.
It said at the time that it would take a £70m hit as a result of the problems.
But in February last year, it more than doubled the expected charge associated with the exit to £160m.
The FCA investigation is the latest problem to face chief executive Debbie White as she tries to turn around the company’s fortunes.
Last month, Interserve reported an annual loss of £244m, more than double that of the year before, leaving chairman Glyn Baker to point to “self-inflicted mistakes of the past”.
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The company, which works on major construction and renovation projects and whose work also includes managing the Ministry of Defence’s training base on Salisbury Plain, has been through a tumultuous period that has seen it warn over profits and seek emergency financing.
Britain’s outsourcing sector is grappling with underperforming contracts – a problem which saw rival Carillion collapse earlier this year.
Source: Sky