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Macquarie Bank's multibillion-dollar UK takeover purchase Thames Water could be fined a record £12.5 million ($33.3 million) for misreporting and poor customer service.
Sydney-based Macquarie paid £8 billion last year for the water company which serves 13 million people across London and southeast England.
New Zealand investment fund Equity Partners Infrastructure Fund No 1 (Epic) has a 1.2 per cent stake in Thames Water.
Thames now faces a £11.1 million fine for misreporting regulatory information and a further £1.4 million fine for poor processes and systems that led to customers receiving unsatisfactory services.
Industry regulator Ofwat said customers had also missed out on payments.
Ofwat chief executive Regina Finn said water was a monopoly business and Ofwat must protect customers by regulating the companies' prices and quality of service.
"To do this we need complete, accurate and reliable information. Misreporting of information damages our ability to regulate the industry," she said.
A Macquarie Bank spokesperson said the issues behind the potential fine pre-dated last year's takeover.
Epic, which has plans to list on the NZX, did not comment yesterday. The investment fund raised $95 million in a public offer of shares this year.
News of the potential fine was likely to be cheered by consumer groups which have spent the past year attacking water companies for failing to meet leakage targets while making huge profits. Water bills in the UK have increased by 7 per cent this year.
The proposed fine follows Ofwat's investigation last year into Thames Water's reporting of its customer service performance.
The regulator said that Thames acted responsibly by informing Ofwat of the misreporting and reimbursing customers the amount they should have received following poor service by the company in the past.
Ofwat stressed that there is no evidence of deliberate misreporting.
Thames Water planned to challenge the proposed fine.
- Staff reporter, agencies
