Drax faces FCA probe amid allegations of misleading biomass sourcing
The City watchdog has launched a probe into British power firm Drax over several issues, including statements regarding its biomass sourcing.
The London-listed group informed its shareholders this morning that it was notified on Tuesday that the Financial Conduct Authority (FCA) had commenced an investigation into the group.
Drax stated that the probe covers the period from January 2022 to March 2024, relating to certain historical statements regarding its biomass sourcing and the compliance of its 2021, 2022, and 2023 annual reports with the listing rules, disclosure guidance, and transparency Rules.
The group told the market it will cooperate with the FCA as part of its investigation.
Following its announcement to the London Stock Exchange on Thursday morning, the FCA confirmed that it has opened an investigation into Drax Group.
The group is currently trading at 644.00p per share, which is over 8 per cent down from its previous price.
This comes after the group’s former public affairs lead accused it of “misleading the public, government and its regulator” over its sourcing of wood for biomass pellets.
Rowaa Ahmar, who was employed by Drax in 2022, revealed allegations in a BBC Panorama documentary, alleging Drax had sourced wood from environmentally important forests in Canada instead of using sawdust and waste wood.
This follows the UK government confirming in February that it would extend subsidies for Drax’s biomass power station in North Yorkshire until 2031 under a new low-carbon dispatchable contract for difference.