Ex-Severn bosses face fraud questions

Two former executives of Severn Trent Water are at the centre of a Serious Fraud Office investigation.

The company was ordered last week to hand back £42m to customers after a two-year investigation by regulator Ofwat, prompted by revelations in Financial Mail about the falsification of figures.

Ofwat sets bills based on accounts and reports provided by suppliers and it had given Severn Trent permission to raise prices at a higher rate than was justified based on the false figures.

Ofwat will also hit the company with another penalty after the SFO completes its linked investigation into false water leakage figures provided by the company.

The SFO is investigating Brian Duckworth, who was managing director until August 2004 and was also on the parent company board, and Mark Wilson, a former finance and regulation director who was finance director of the parent company during 2005.

An investigative source said: ‘The SFO is looking at a pool of people closely involved in providing data to the regulator. It is fair to say that Duckworth and Wilson are the persons of strongest interest.’