Pokye

Wet Money

Here’s somethng I don’t understand:

The water industry regulator, Ofwat, is planning to fine Southern Water £20.3m for “deliberately misreporting information” about its performance. The misreporting meant that Southern was able to raise its prices by more than it should have done, Ofwat said. The fine is also for poor processes and systems that meant “customers received poor service”, the regulator added.

OK - so naughty Southern Water. But there again, the article suggests that they both owned up to this problem AND compensated their customers. Furthermore, Ofwat (what a genius it was who came up with these bloody names!) state (although not Southern Water) that the fine will not burden customers because it will come out of profits so just hit the shareholders and their dividends.

Now here’s the question. When Southern Water hand over this huge sum of money - who, or what, gets it? If this were a criminal or civil case in a court of law then the plaintiff would benefit. But this isn’t a legal court ruling, this is a ‘regulatory body’ appointed by, yes, you guessed it, the government. So where does the money go? It looks more to me like this is almost a tax on being naughty.

Ideally, the company should be made to pour that £20.3m into it’s operations. Sure, the shareholders get hurt and they, in turn, can get rid of the directors who are responsible for the loss. That would be a fitting punishment. Now I don’t know the rules here but I suspect the money just disappears under the mattress of the government and to that, I strongly object. And so should the customers of Southern Water.