The finance watchdog is reportedly investigating a professional rugby club after an investigation by a weekly newspaper.

The Financial Conduct Authority is looking into whether Coventry-based club Wasps misled the market about the state of their finances and how quickly they rectified the matter, according to the Financial Times.

News of the probe’s launch comes after the Coventry Observer last year revealed how auditors PwC had resigned after finding Wasps’ accounts had been falsified with an “override of management controls” by £1.1million, which would have made Wasps’ financial performance appear better to bondholders.

The Observer had raised the matter with the FCA, London Stock Exchange, the police and other regulators – and called for an inquiry into whether the markets had been properly notified.

The Observer investigated the matter last year

According to the FT report, the FCA has now opened a formal investigation and is calling in individuals for interviews.

Both the FCA and Wasps, who were originally based in the London area before moving to Coventry in 2014, declined to comment when approached by the FT.

Observer editor Les Reid, who conducted the original investigation, told HTFP: “After months of mystery and Wasps’ own PR spin concerning the indebted rugby club’s ‘ accounting ‘error’, we revealed former auditor PwC’s damning verdict that Wasps had actually falsified its accounts with an ‘override of management controls’ to massage its financial performance to bondholders, falsely classing a £1.1million shareholder contribution as income.

“Our subsequent lengthy investigation last year raised further questions with financial watchdogs, Wasps and other authorities, who would not be publicly drawn on whether it would confidentially investigate.

“We are encouraged to see the report in the FT that the Financial Conduct Authority is investigating whether the bond markets were misled by Wasps following the accounts falsification, while many questions at this stage remain unanswered.

“It comes as Wasps – backed by Coventry City Council leaders – intend to lock out tenants Coventry City Football Club from the Ricoh Arena stadium after this season, unless the 136-year-old football club’s owner Sisu drops its legal action against the council’s 2014 stadium sale to the then London Wasps – as a pre-condition to talks.

“The Coventry Observer has consistently campaigned for all sides in the multi-party dispute to be held to account and for a negotiated fairer stadium and academy deal for Coventry City, after years of failed political agendas.”