\n<\/p>\n
Lenders trying to take control of Thames Water are attempting to thwart environmental campaigners by asking the government to block them from pursuing high court claims.<\/p>\n
Creditors owed \u00a313bn by Britain\u2019s biggest water company want ministers to order the Environment Agency (EA) to prioritise \u201cenvironmental betterment over punitive enforcement\u201d \u2013 which they believe would \u201csignificantly mitigate\u201d the risk of campaigners bringing judicial reviews or private prosecutions.<\/p>\n
Feargal Sharkey, a prominent water campaigner and the former lead singer of the Undertones, said such a move would \u201cundermine one of the fundamental cornerstones of democracy\u201d and urged the government to reject the demands.<\/p>\n
This month, the Guardian revealed the lenders had made a series of requests for leniency from fines and enforcement by the EA, Ofwat and other regulators as part of their pitch to buy and turn around the struggling company.<\/p>\n
Documents seen by the Guardian show a specific clause that is aimed at neutering the risk of campaigners bringing a judicial review or civil litigation.<\/p>\n
\u201cThere is high risk of campaigners\/environmental interest groups bringing judicial review proceedings against any decision by the EA to relax or defer compliance obligations or agree not to prosecute the company for breaches of law,\u201d states the creditors\u2019 plan.<\/p>\n
\u201cThere is also a strong possibility of those groups supporting individuals with bringing private prosecutions against the company and\/or its directors and senior officers.<\/p>\n
\u201cThe risk of such action and its outcomes, which are evidently highly prejudicial to the sustainable recovery of turnaround water companies, can be significantly mitigated by clear government direction to the EA and the EA setting out a clear framework for prioritising environmental betterment over punitive enforcement (the latter having little or no positive environmental benefit).\u201d<\/p>\n
They also suggest the government could push through emergency legislation to block legal action.<\/p>\n
Thames Water\u2019s fate hangs in the balance after the environment secretary, Steve Reed, told parliament on Thursday that the government was stepping up preparations for temporary nationalisation and the US private equity firm KKR quit an auction for the company.<\/p>\n
The lenders argue protection from enforcement and legal action is vital so that cash does not leak out of the business and Thames can escape a \u201cdoom loop\u201d of underperformance. They are offering to cut some of the company\u2019s debts and provide \u00a35.3bn of new funding in return.<\/p>\n
Should the government impose a special administration regime (SAR), essentially a temporary nationalisation, it would wipe out a significant portion of Thames\u2019s \u00a320bn of debts.<\/p>\n
A band of about 100 creditors, including big institutional investors such as Aberdeen, BlackRock, Invesco and M&G, and US hedge funds such as Elliott Investment Management and Silver Point Capital, are trying to avoid huge losses by tabling their own turnaround plan for the company.<\/p>\n
The lenders also want Ofwat to reverse \u00a3254m in fines and penalties imposed on Thames over the past two years.<\/p>\n
These comprise two fines imposed in May \u2013 \u00a3104.5m for \u201csignificant\u201d sewage and wastewater failures and \u00a318.2m for illegally paying dividends \u2013 and another \u00a3131.3m of tax losses that Thames transferred to its parent company, which Ofwat has said it will claw back.<\/p>\n
The Liberal Democrat MP for Witney in Oxfordshire, Charlie Maynard, has challenged Thames Water in the high court, including trying to block a \u00a33bn high-interest rescue loan from the creditors.<\/p>\n
Maynard said: \u201cThames Water\u2019s creditors are trying to dictate government policy and bully the regulators. Steve Reed must not cave in to these demands. The secretary of state should call their bluff.<\/p>\n
skip past newsletter promotion<\/p>\n
Sign up to Business Today<\/span><\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n Privacy Notice: <\/strong>Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.<\/span><\/p>\n after newsletter promotion<\/p>\n \u201cIf the company ends up in special administration it is the vulture funds who stand to lose billions, Thames Water\u2019s 16 million customers will be released from a mountain of debt and the company will be better able to start fixing its problems.\u201d<\/p>\n Sharkey said: \u201cNot only has Thames polluted our rivers, ram-raided bill payers\u2019 bank accounts for cash, it is now attempting to undermine the very fundamentals of democracy: the right of free speech, to ask questions, to oppose and to demand justice. The government must stand up and oppose any attempt by Thames Water to railroad the British people.<\/p>\n \u201cBeing able to apply for a judicial review is one of the fundamental cornerstones of democracy. As a democracy, we are totally dependent on the ability of people to take the government and quangos to the high court to have that level of scrutiny from the judiciary. It\u2019s a balance and check against abuse of power.\u201d<\/p>\n A spokesperson for the creditors said: \u201cBroad regulatory support is needed to unlock a market-led solution for Thames Water that will secure billions of pounds in fresh investment for its ageing network, allowing a world-class leadership team to start the intensive turnaround and deliver better outcomes for customers and the environment.\u201d<\/p>\n A spokesperson for the Department for Environment, Food and Rural Affairs said: \u201cThe government will always act in the national interest on these issues.<\/p>\n \u201cThames Water must meet its statutory and regulatory obligations to their customers and to the environment. It is only right that the company is subject to the same consequences as any other water company.<\/p>\n \u201cThe company remains financially stable, but the government has stepped up our preparations and stand ready for all eventualities, including special administration regime if that were to become necessary.\u201d<\/p>\n A spokesperson for Thames said: \u201cThames Water is committed to improving outcomes for the environment and its customers. We are investing billions of pounds in our network and any recapitalisation of the business will need to ensure that is maintained for the benefit of all our stakeholders.<\/p>\n \u201cOur focus remains on a holistic and fundamental recapitalisation, delivering a market-led solution, which includes targeting investment-grade credit ratings. In order to be investable, we and prospective investors would need to engage in discussions with our regulators.\u201d<\/p>\n A spokesperson for Ofwat said: \u201cWe are assessing whether the plans are realistic, deliverable and will bring substantial benefits for customers and the environment.\u2019\u2019<\/p>\n","protected":false},"excerpt":{"rendered":" Lenders trying to take control of Thames Water are attempting to thwart environmental campaigners by asking the government to block them from pursuing high court claims. Creditors owed \u00a313bn by Britain\u2019s biggest water company want ministers to order the Environment Agency (EA) to prioritise \u201cenvironmental betterment over punitive enforcement\u201d \u2013 which they believe would \u201csignificantly<\/p>\n","protected":false},"author":1,"featured_media":9205,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50],"tags":[919,847,1185,522,558,324,1184,1182,1183],"class_list":{"0":"post-9204","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-environment","8":"tag-action","9":"tag-block","10":"tag-campaigners","11":"tag-demand","12":"tag-government","13":"tag-legal","14":"tag-lenders","15":"tag-thames","16":"tag-water"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/9204","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9204"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/9204\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/9205"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9204"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9204"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9204"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}