Britain's largest water company is facing a potential fine exceeding £40 million for distributing a shareholder dividend despite its underperformance, as per information obtained by Sky News.
Ofwat, the regulatory body, informed Thames Water last month of its intention to impose the penalty for violating rules regarding dividend payments. This development adds to the mounting challenges for Thames Water, which is grappling with the possibility of temporary nationalisation due to a substantial debt exceeding £15 billion.
Of particular note is the size of the fine under consideration by Ofwat, surpassing the £37.5 million dividend paid to shareholders last autumn, as disclosed by a Thames Water source. The company retains the option to challenge the proposed fine before a final verdict is reached, but with the upcoming general election on 4th July, the timing suggests that a conclusive decision may be postponed until after that date.
Furthermore, Ofwat has deferred its preliminary rulings on the spending and investment plans of privately owned water companies in Britain for the next five years until after the election. Originally scheduled for 12th June, these determinations are now delayed due to the electoral timetable.
