Water company faces fraud charges

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Severn said it faced Serious Fraud Office (SFO) action over three offences relating to data on leakages submitted between 2000 and 2002, although no individual will be charged.

Chief executive Tony Wray said: "We will now study carefully the details of the charges, which relate to the responsibilities of a previous regime."

Severn serves 3.7 million household and business customers in England and Wales.

The SFO charges are the culmination of a two-year investigation. Ofwat referred the matter to the SFO in May 2005 after concerns over the reliability of the data supplied by Severn Trent. The SFO charges relate to the company's leakage data in Ofwat returns for June 2000, 2001 and 2002.

Information given to Ofwat is crucial in determining how much water firms can charge households for water, waste services and the cost of repairing the network of pipes.

Mr Wray added that Severn Trent had "co-operated fully" and a comprehensive review of the business had been undertaken since 2005.

Ofwat conducted its own investigation into Severn Trent following allegations made by an employee of the utility in May 2004.

Severn Trent apologised to customers and reimbursed them following the publication of Ofwat's interim report in March 2006. The company acknowledged that the regulator "may expect further amends to be made to customers".

The group is also facing Ofwat penalties over "misstated" customer relations data and added that it was "unable to give a reliable estimate" over the potential fines it faces.