08/04/2008

Ofwat Proposes Huge Fine For Severn Trent

Birmingham water company, Severn Trent Water could be presented with a £35.8 million fine for misleading customers and offering poor service.

Water industry regulator Ofwat is planning to fine the firm £34.7 million for fraud and £1.1 million for "substandard" service.

The fine, which equates to almost 3% of the company's turnover is the largest served by watchdog.

Severn Trent has admitted negating to report the actual water leakages in 2001 and 2002, after a Serious Fraud Office investigation.

Ofwat chief executive Regina Finn said: "The size of the fine reflects how seriously Ofwat takes the deliberate misreporting of information.

"This sends a clear message to the company and the rest of the water sector, Ofwat will protect consumers and companies must comply with their legal obligations or pay the price."

Tony Wray, chief executive of Severn Trent PLC said that his team had uncovered misreporting and poor service in their customer relations department.

He said: "We took steps to implement proper controls and an ethical working culture with the highest standards to ensure there can be no repetition of this unacceptable behaviour.

"We fully acknowledge and accept the company is responsible for all its failures."

Severn has said that it will lower bills by £2.40 per household so that it does not profit from the deception.

The company serves more than eight million customers across the Midlands.

(DS/JM)


Related UK National News Stories
Click here for the latest headlines.

07 March 2006
Customers to receive refund from Severn Trent Water
Customers of Severn Trent Water are to receive refunds after an investigation by Ofwat found the water company had overcharged customers. The regulator's investigation found that the water company, which has more than eight million customers, had provided regulatory data that was either "deliberately miscalculated" or "poorly supported".
14 May 2013
Possible Severn Trent Takeover News Drives Up Share Prices
A potential takeover bid has been made to Severn Trent, valuing the company at up to £5bn. The water company, which serves the water and sewerage needs of some 4.
01 July 2008
Severn Trent Fined £2m Over 'Water Leak Lies'
Severn Trent Water has today been fined £2 million at the Old Bailey, for lying about leakages in its water system. The second largest water company in Britain - and the first to be prosecuted for making false statements about its leaks - pleaded guilty to two offences related to leakage data supplied to Ofwat in 2001 and 2002.
10 October 2014
Severn Trent Water To Cut 500 Jobs
Severn Trent Water in Coventry have announced it is to cut 500 jobs. The company said that following the merger of its sewerage and water supply divisions it is reducing its management and support departments.
31 July 2007
Tap Water Restored To More Flood-Hit Homes
Mains water supplies have now been restored to more than 70,000 homes in the flood-hit Gloucester area. Severn Trent Water said that the programme of re-filling more than 1,200 miles of water pipes is continuing to make steady progress.