Barclay Says He’ll Take Tough Line on Thames If It Broke Rules

(Bloomberg) -- The UK’s new Environment Secretary Steve Barclay said he would “take an extremely tough line” on water companies that break regulations, after it emerged that Thames Water Plc may have misleadingly categorized a loan as equity.

Thames Water’s co-chief executive offciers will face an emergency parliamentary hearing on Tuesday called to discuss the state of the company’s finances — its debts have soared to £14.7 billion ($18.5 billion) — after auditors warned that its parent company, Kemble Water Holdings, may run out of money by April if shareholders don’t inject more equity.  

The UK’s biggest water and sewage company has denied reports that a £500 million cash injection from the company’s owners earlier this year was actually a loan charging 8% annual interest. 

“I will take a tough line on any water company that is acting in breach of regulations or of the law,” Barclay told reporters one the sidelines of COP28 climate talks in Dubai on Saturday. “I will take an extremely tough line with the regulatory bodies as part of that.”

Barclay, who took over at the Department for Environment Food and Rural Affairs, one month ago, said he has not yet met with water companies, but has met with the chief executive of trade association WaterUK and regulator Ofwat.

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