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Severn Trent faces a £35.8m fine Severn Trent faces a £35.8m fine
(10 minutes later)
Ofwat is proposing to fine Severn Trent Water £35.8m for deliberately providing false information and offering the company's customers a poor service.Ofwat is proposing to fine Severn Trent Water £35.8m for deliberately providing false information and offering the company's customers a poor service.
There is a fine of £34.7m, or 2.9% of total turnover for the fraud, with a £1.1m penalty for bad customer service.There is a fine of £34.7m, or 2.9% of total turnover for the fraud, with a £1.1m penalty for bad customer service.
The announcement by the water industry regulator comes after Severn Trent admitted it had misreported its levels of water leakage in 2001 and 2002.The announcement by the water industry regulator comes after Severn Trent admitted it had misreported its levels of water leakage in 2001 and 2002.
It follows an investigation into the firm by the Serious Fraud Office.It follows an investigation into the firm by the Serious Fraud Office.
'Unacceptable''Unacceptable'
"Seven Trent Water's behaviour was unacceptable," said Ofwat chief executive Regina Finn."Seven Trent Water's behaviour was unacceptable," said Ofwat chief executive Regina Finn.
We fully acknowledge and accept that the company is responsible for its failures Tony Wray, chief executive Severn TrentWe fully acknowledge and accept that the company is responsible for its failures Tony Wray, chief executive Severn Trent
"The size of the fine reflects how seriously Ofwat takes the deliberate misreporting of information."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.""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 Water's parent company Severn Trent PLC, said "a previous regime" at the firm was responsible.Tony Wray, chief executive of Severn Trent Water's parent company Severn Trent PLC, said "a previous regime" at the firm was responsible.
The company is now cutting its bills by £2.40 per household "to ensure we have not profited in any way".The company is now cutting its bills by £2.40 per household "to ensure we have not profited in any way".
'Promptly alerted'
"When my new management team and I uncovered misreporting and poor service in our customer relations department we promptly alerted Ofwat," added Mr Wray."When my new management team and I uncovered misreporting and poor service in our customer relations department we promptly alerted Ofwat," added Mr Wray.
"And [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."And [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 that the company is responsible for its failures.""We fully acknowledge and accept that the company is responsible for its failures."
Severn Trent Water serves more than eight million customers from the Bristol Channel to the Humber, and from mid-Wales to the East Midlands.Severn Trent Water serves more than eight million customers from the Bristol Channel to the Humber, and from mid-Wales to the East Midlands.