Chairman comments on legacy issues
Severn Trent plc today accepted the £2 million fine for leakage misreporting in 2001 and 2002 handed down at the Central Criminal Court earlier this month, and pledged to continue its programme of improvements as shareholders attended the company’s AGM at the International Conference Centre in Birmingham.
Sir John Egan, Chairman of Severn Trent plc, said: “When Judge Jeremy Roberts passed sentence at the Central Criminal Court on 1st July, he said that the company’s leakage reporting in 2001 and 2002 was a serious case involving a lack of commercial probity and integrity - and that people at a senior level were involved over an extended period in deliberately concealing the true position.
“However, the judge then stated that the new regime had learnt its lesson and put its house in order, and the individuals responsible are no longer in post.
“Severn Trent has decided to accept the £2 million penalty and will not appeal. There is no doubt that the previous regime and culture in place during 2000 to 2004 lacked appropriate controls and procedures. There were indefensible shortcomings in Severn Trent’s previous leadership during that era.”
Sir John added: “However, having considered very carefully all the options and possible outcomes and having taken legal advice, we have decided not to pursue the former management because there would be no guarantee of success or recompense and therefore such action would not be in the best interests of our customers and other stakeholders.
“Almost four years of intensive time and energy has been invested by this Board and management team putting our organisation back into the positive position our customers, regulators, shareholders and employees deserve. That time and energy is now better spent delivering our programme of service improvements for customers and satisfying the expectations of regulators and shareholders.”
Chief Executive Tony Wray, also addressing the AGM, said: “We have already made good progress on our improvement programme – achieving better customer service standards and outperforming against a tougher leakage target - but still have further to go as we strive to be among the best in each area of our work.
“The coming year will see a revitalised Severn Trent aiming to raise standards still higher and further invest in improving our operational efficiency to deliver better customer service and enhanced shareholder value.”
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