Revealed: Wessex Water’s Malaysian owners under investigation for corruption
Malaysian anti-corruption investigators have launched probe into YTL Power subsidiary over £700m public contract
Anti-pollution campaigners protesting against Wessex Water (Source: Surfers Against Sewage.)
A subsidiary of the Malaysian firm which owns one of Britain’s largest water companies is under investigation in relation to “allegations of corruption, mismanagement and abuse of power”.
Wessex Water’s customers already have the highest bills in England. Last month, the firm admitted polluting rivers with untreated sewage.
Now Democracy for Sale can reveal that the Malaysian Anti Corruption Commission is investigating a subsidiary of Wessex Water’s owner, YTL Power.
Mobile phone operator YTL Communications is being investigated in connection with a four billion Malaysian Ringgit (£700 million) public contract to provide broadband internet to schools.
The contract was supposed to run for 15 years but was allegedly shortened to seven and a half years “without any reduction in contract value,” according to the Malaysian anti-corruption investigators.
YTL Communications “is providing full cooperation” to the anti-corruption commission, which “recently requested information” from the firm, according to a statement by its parent company YTL Power.
The probe, which was made public in Malaysia in September, is still on-going, Democracy for Sale understands.
YTL Power purchased Wessex Water from Enron in 2002 shortly before the American company went bankrupt during one of the largest fraud scandals in history.
News of the Malaysian investigation comes amidst rising public anger about the British firm’s sewage dumping prosecutions, customer bill hikes and contentious finances.
More than 70% of England’s water industry is foreign-owned including Wessex Water, which is ultimately controlled, through YTL Power, by the billionaire Yeoh Tiong Lay family.
Four members of the family currently serve as non-executive directors of Wessex Water, including Francis Yeoh who was given a knighthood in 2019.
Last year, the firm paid out £78 million in dividends, despite making an overall loss, while its debt climbed by 10% to more than £3 billion, according to accounts published in November.
Ashley Smith, a retired police detective turned water campaigner with Windrush Against Sewage Pollution, told Democracy Sale, that the combination of “captive bill payers, monopoly companies and weak regulation” was putting the entire British water industry at risk.
Wessex’s customer bills are currently the highest in England, at £508 per year, according to regulator Ofwat, which has approved plans to raise them by 29% over the next five years.
In November, after pleading guilty to polluting two rivers with untreated sewage that killed thousands of fish, Wessex Water was fined £500,000. The prosecution by the Environment Agency took six years.
Next week, MPs will debate a new water bill which will enable regulators to block “bonuses for water company executives and bring criminal charges against those who break the law.”
Labour has also set up a review of the “piecemeal” and “fragmented” regulatory system. But neither initiative is slated to address the issue of private ownership and profit-making, which critics say are driving the crisis.
Prem Sikka said that “the government is not really dealing with the reality of our broken privatised water system. It's just repeating the Tory policy of leaving it to the banks and the private equity sector and hoping something will come along.”
“Until the government deals with the root problems - the companies paying billions in dividends while customers' bills skyrocket and our rivers are polluted - nothing will change," the Labour peer told Democracy for Sale.
James Wallace, CEO of River Action, said: "The recently launched Independent Water Commission must investigate alternative ownership and governance models to ensure people and nature are put before the greed of billionaires and global investment markets.”
YTL Power and Wessex Water have yet to respond to repeated requests for comment.
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