Severn could face further Ofwat fines
Severn Trent Water may face further financial sanctions that may run into millions from regulator Ofwat in the final act of the long-running saga over misleading data about its leakage rates.
The water business, which services eight million people in the Midlands and Wales, became the first British utility firm to be convicted of criminal fraud at the Old Bailey last week.
It was fined £2m in a case brought by the Serious Fraud Office (SFO), for making false returns to the regulator in 2001 and 2002.
The water company is already facing a separate £35.8m fine from Ofwat for separate offences involving providing false information and poor customer service in the four-year period from 2000.
But Severn Trent is braced for the regulator to come back to it one more time over this matter to look for compensation for customers, which some sources say could top £10m.
A source close to the water business said: “The sanction could be for Severn Trent to cut bills, increase investment, cancel price rises, or take no further action. Ofwat has a large range of options open to it.”
A spokesman for Ofwat said: “We are studying the SFO case, and reserve the right to take action if needed. No decisions have been made yet.”
The water firm was led at the time by managing director Brian Duckworth, finance director Mark Wilson and group chairman David Arculus. All of whom have now left the company.
Current Severn Trent chief executive Tony Wray said last week: “We deeply regret the mistakes of the previous regime.”
