Serious leaks

The UK Serious Fraud Office has informed Severn Trent Water that it is to be charged with offences concerning the provision of false information to the industry regulatory body, Ofwat.

Three charges are to be brought against the company under section 207 of the UK Water Industry Act 1991. They relate to leakage data in the June Returns provided to Ofwat for 2000, 2001 and 2002.

The SFO informed Severn Trent on October 31 2005 that, as a result of a referral by Ofwat, it was undertaking a criminal investigation into alleged reporting irregularities concerning leakage data supplied to Ofwat by Severn Trent Water between 2000 and 2003.

Ofwat had been conducting its own investigation following allegations of false reporting made by an employee of Severn Trent Water in May 2004. On March 7 2006, Ofwat published its interim report concerning the allegations of false reporting made against Severn Trent Water in 2004. In responding to the report Severn Trent apologised to customers and has credited customers' accounts and reduced future tariffs.

Severn Trent also acknowledged that Ofwat may expect further amends to be made to customers. Ofwat has stated that this sum will be considered with Severn Trent Water on completion of the SFO investigation into leakage. 

'We will study carefully the details of the charges which relate to the responsibilities of a previous regime. Until that process is completed and we have taken legal advice, we cannot comment further on our response to the charges,' said Tony Wray, chief executive of Severn Trent.

'What I can say is that this new board and management team has taken, and will continue to take, all actions we think appropriate to ensure the maintenance of both high ethical and professional standards and resilient and effective controls throughout our organisation.'

A date for the first court hearing in the criminal proceedings has yet to be fixed.