Britain's largest water supplier, Thames Water, faces accusations of financial misconduct and calls for greater transparency following revelations about a £150 million ($198 million) dividend payment approved by its board, according to The Guardian.
The decision to authorize the dividend allegedly happened on March 27, just before investors took back £500 million ($632 million) in pledged emergency funding.
It was also alleged that Thames Water did not disclose the dividend payment when announcing the funding withdrawal the following day.
Ofwat, the regulator overseeing the water industry in the UK, will now investigate the utility company's decision to pay a dividend to its intermediate parent company, Kemble Water Eurobond. This follows another previous payment of £37.5 million ($47.3 million), which was also unrecorded.
Thames Water defended that the £150 million dividend was used to cover pension obligations and offset tax losses within its corporate structure.
READ MORE : Australian Bank Macquarie Criticized For Lending Money to Britain's Biggest Water Firm, Thames Water
Criticisms Against Thames Water
Critics, including Gary Carter of GMB, stated that it reflects a lack of transparency and prioritization of shareholder interests over operational necessities like environmental compliance and worker compensation.
Just earlier this year, VCPost learned that Thames Water was already seeking help from advisors as their debt increased. This time, parties in the UK government are giving their advice.
Liberal Democrats first condemned the payout and are now advocating for Thames Water's particular administration and reform. The Green Party and campaigner Feargal Sharkey echoed these sentiments, citing systemic failures and regulatory lapses within the privatized water industry.
In response to concerns about financial integrity, Ofwat is set to release its draft assessment of water companies' plans, with Thames Water's financial disclosures pending by mid-July.
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