BusinessCompany NewsSevern Trent rejects allegations of ‘fraud’

Severn Trent rejects allegations of 'fraud'

Water and utilities provider Severn Trent has rebuffed allegations of a five-year accounting fraud that overcharged customers and deceived the industry watchdog, resulting in a £75m hole in its accounts.

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In a statement released today the water company said: ‘Having reviewed the results of the investigation, the board has concluded that these issues have had no effect upon the integrity of the group’s accounts and that water customers have not been overcharged.’

In May, an employee of Severn Trent Water raised a number of allegations internally about the company’s accounting and regulatory returns to industry watchdog Ofwat. The board appointed forensic accountants from its auditor PricewaterhouseCoopers to carry out an independent investigation.

The employee in question David Donnelly, income and debt reporting manager at Severn Trent, alleges the company falsified corporate accounts and lied to its auditor, according to The Mail on Sunday.

Severn Trent has now launched a disciplinary after the investigation revealed ‘prima facie evidence of some behaviour that the board believes falls short of the high standards it expects from employees. Accordingly, a disciplinary investigation has been instigated and other action is being taken as necessary’. A spokesman for Severn Trent later said: ‘we deny the allegations.’ He added that the company doesn’t not comment on specific disciplinaries against employees.

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