Insurance giant Aviva is facing a possible probe by the UK City watchdog over its abandoned and heavily-criticised move to cancel £450m (€514.46m) worth of preference shares.
The Financial Conduct Authority (FCA) said it is considering whether to launch a formal investigation after Aviva's original announcement earlier this month "raised serious issues".
In a letter responding to concerns aired by the Treasury Select Committee, FCA chief executive Andrew Bailey said the regulator was reviewing Aviva's compliance with market abuse rules and whether preference shareholders had lost out financially.
Aviva said last week it was rowing back on its controversial proposal to cancel the preference shares, which pay high fixed dividends.
The original proposal - made as part of a plan to return £500m (€571.62m) to shareholders - had drawn criticism from investors and the FCA, although Aviva said it had received legal advice that it could cancel its preference shares at par value.
The FCA said its inquiries would examine if Aviva was right to say it could cancel the shares, and if the announcement was in line with market regulations.
Mr Bailey said: "Our immediate concern had been to understand the basis upon which Aviva was acting, including the clarity of the information available to securities holders ... along with the market integrity concerns that the proposals raised."
He added: "The FCA welcomes the fact that the company has since clarified the position in its announcement on the 23 March 2018 and (Aviva chief executive) Mark Wilson's statement that 'preference shareholders can rest secure in their holdings'.
"However, the FCA's inquiries continue and, in particular, we are focusing on the treatment of those holders (and potentially now former holders) of the company's irredeemable preference shares that may have lost out financially as a result of these events."