Southern Water's former Chief Executive Matthew Wright has been charged with conspiracy to defraud Britain's Environment Agency by allegedly manipulating wastewater treatment checks, the environmental regulator said on Wednesday.
The Environment Agency alleges Wright and three other former Southern Water employees conspired to defraud the Environment Agency and water regulator Ofwat between 2012 and 2017, allowing the company to avoid at least £45 million ($60 million) in penalties.
Wright had argued the Environment Agency lacked the power to prosecute him for conspiracy to defraud, but his challenge was dismissed by the High Court on Wednesday.
Southern Water, which has over 4 million customers, said the charges related to "a historic set of failures" and the individuals charged are no longer with the company.
"These were uncovered through an internal company investigation in 2017," Southern Water said in a statement. "As soon as they were identified, Southern Water reported them to regulators, including the Environment Agency."
Ofwat did not immediately respond to Reuters' requests for comment.
Wright's lawyer said in a statement that he denies all wrongdoing and has cooperated fully with the Environment Agency's investigation.
The charges come amid growing public anger against privatised water companies in Britain, particularly focused on sewage discharges, and after new Prime Minister Andy Burnham has said that nationalisation is the best solution for Thames Water, Britain's largest water company.
Environment Secretary Angela Eagle said in a statement: "The public are rightly sick of environmental pollution – and attempting to cover it up is outrageous. Anyone found guilty of this crime will face the full force of the law."
She added that the government had committed to ending operator self-monitoring "to ensure this cannot happen again in the future."
The Environment Agency alleges there was a deliberate plan to stop the discharge from wastewater treatment works from being properly tested when it was believed the site would or might fail, to prevent true results being provided.
The regulator argues that on Southern Water's own assessment it avoided penalties of around £45 million, though the regulator says the figure is higher, the High Court said in its ruling.
The conspiracy to defraud charges will now proceed at Medway Magistrates' Court. The charge carries a maximum sentence of 10 years' imprisonment upon conviction.
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