Severn Trent, the UK's second largest water company, was today fined £2 million at the Old Bailey for misreporting leakage information in a case brought by the Serious Fraud Office (SFO).

Today's penalty adds to the £35.8 million already imposed on the company by Ofwat, the water regulator, for deliberately giving false information and for poor customer service.

However, while Judge Jeremy Roberts QC was robust in his criticism of the company, the SFO had hoped the court would hand down a fine closer to £70 million to deter other companies from following Severn Trent's example.

Judge Roberts said: “I consider this to be a serious case. The sorry saga of this case reveals a lack of honesty and transparency in dealing with the regulator.

“Persons at a senior level, namely members of the board, were involved over an extremely long period of time in the deliberate concealment of the true position as shown by the information in the company’s own possession.”

Severn Trent had pleaded guilty to two offences under the Water Industry Act of marking false returns to Ofwat in 2001 and 2002.

The court heard this morning that the company had reported an estimated yearly water loss of 340 million litres per day to meet targets, while the true figure was around 514 million litres.

By reporting false figures the company avoided paying out millions of pounds on repairs.

Tony Wray, chief executive at Severn Trent, largely blamed the company’s former management and said no one who was responsible still worked for the group.

Mr Wray said: "We are finally close to resolving these issues from the past and putting this organisation back into the positive position our customers, regulators and staff deserve."

"We deeply regret the mistakes of the previous regime for which we have apologised to customers. There were indefensible shortcomings in Severn Trent's previous management and control systems during the 2000 to 2004 era."

He added that after taking legal advice, and considering the best interests of customers and other stakeholders, the company had decided not to take action against the former management.

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