Thames Water accused of ‘chicanery’ over £150m dividend fee

Thames Water has been urged to point out larger transparency over its funds and was accused of “monetary chicanery” after it emerged its board had accredited a £150m dividend hours earlier than its shareholders U-turned on offering emergency funding.

The Guardian revealed final week that the board of the struggling water provider agreed to the payout at a gathering on 27 March.

The next day, the debt-laden firm mentioned its buyers have been no longer willing to provide £500m of funding that they had beforehand pledged, elevating the prospect that the corporate could also be quickly nationalised. Thames Water made no point out of the dividend fee at that time.

The water business regulator, Ofwat, deliberate to analyze the circumstances across the dividend paid by Thames, sources mentioned. The corporate was already under investigation over its resolution to pay a separate £37.5m dividend on the time the £150m dividend was paid.

Britain’s greatest water provider mentioned the fee was constructed from the regulated firm to an intermediate dad or mum firm, Kemble Water Eurobond, to “settle a pension top-up fee” and “give up aid” on tax losses.

Gary Carter, GMB nationwide officer, mentioned: “Thames Water has as soon as once more proven an alarming lack of transparency.

“After all GMB needs our members’ pension pots to get again within the black – however shareholders must be topping it up.

“As a substitute they’re taking cash out of the regulated firm, cash wanted to cease spills and pay our members’ wages.”

He added: “Thames Water must entrance up about its monetary chicanery, whereas shareholders must cough as much as fill the pensions black gap – not clients or taxpayers.”

The Liberal Democrat Treasury spokesperson Sarah Olney, who has called for Thames Water to be put into special administration by the federal government and reformed as a public profit firm, mentioned: “This can be a scandalous payout whereas our rivers are polluted with sewage and the corporate stands getting ready to chapter.

“It’s concrete proof of why we have to abolish Ofwat and create a brand new water regulator with actual enamel and energy.

“The general public won’t ever forgive the Conservative occasion for the way they’ve let water companies get away with monetary mismanagement and environmental vandalism.”

Adrian Ramsay, co-leader of the Inexperienced occasion of England and Wales, mentioned: “The additional revelations about Thames Water additional show that the experiment of a privatised water system has basically failed.

“At a time when our rivers are choked with sewage and water pipes are at bursting level, it’s unconscionable that water firms proceed to prioritise payouts over their obligations to the general public and the atmosphere.”

The campaigner and former Undertones singer Feargal Sharkey mentioned: “The dividend illustrates but once more the utter contempt and disdain that the water business treats regulators and the politicians that oversee it with.

“Ofwat appears to haven’t any capability to regulate them. There’s a conceit and contempt in direction of clients and regulators – that’s what occurs when you may have an organization working a monopoly with no correct oversight.”

The £150m didn’t attain exterior Thames shareholders however did go away the ringfenced portion of the group’s complex corporate structure. Ofwat has been clamping down on the move of money from ringfenced water firms to holding firms, amid considerations that payouts are weakening the funds of regulated water firms.

Ofwat is because of publish its draft response to water companies’ five-year enterprise plans on 11 July. Thames’s annual outcomes must be revealed by 15 July.

Thames Water has been approached for remark.