Severn Trent faces prosecution

West Midlands water giant Severn Trent is to be prosecuted for passing false information to regulators that led to it overcharging its 3.7 million customers, it emerged today.

The UK's second biggest water company admitted it was facing criminal charges over claims it gave false information to the industry's regulator, Ofwat.

Birmingham-based Severn Trent said it faced Serious Fraud Office action over three offences relating to data on leakages submitted between 2000 and 2002, although no individual will be charged.

It could mean millions of pounds in fines for the company, but Severn Trent said today that its customers would not foot the bill for any court action. The company and its shareholders will pay any fines.Severn Trent expects to be formally charged at a London magistrates court in the next two to three weeks. The case will then be committed to the Crown Court, where the size of any fine, if Severn Trent is convicted, would be at the discretion of the judge.

Chief executive Tony Wray, appointed in March 2005, was quick to point out today that the prosecution related to a previous management team at the company.

He said: "We will now study carefully the charges, which relate to the responsibilities of a previous regime."

The SFO charges are the result of a two-year probe. The group is also facing Ofwat penalties over "misstated" customer relations data and added today that it was "unable to give a reliable estimate" over the potential fines it faces.