The UK financial markets watchdog has opened an investigation into Interserve regarding market disclosures connected to the outsourcing and construction company’s energy from waste business.

The Financial Conduct Authority (FCA) probe relates to how Interserve assessed and communicated its decision to stop building plants that generate energy from waste covering the period from 15 July 2016 to 20 February 2017.

A brief Stock Exchange update this morning said: “Interserve has received a formal notice that it has been referred to the Enforcement Division of the Financial Conduct Authority.”

Shares jumped by more than 12% when Interserve announced its intention to pull out of the energy from waste business in August 2016 after a £70 million hit on a Glasgow project contributed to a half-year loss in profits.

Earlier that year the firm revealed it would have to write off £70m on a £146m contract with Viridor for the Glasgow Recycling & Renewable Energy Centre, citing issues relating to the design, procurement and installation of the gasification plant.

But on February 20 2017, shares slumped by more than 25% when Interserve raised its cost provision for getting out to £160m.

Interserve said it will co-operate fully with the investigation and will update the market on the outcome in due course.