Thames Water's chairman has conceded that he misspoke during a parliamentary inquiry regarding bonuses linked to a £3bn emergency loan earlier this year.
In a candid letter addressed to the chair of the environment, food and rural affairs (EFRA) committee yesterday, Sir Adrian Montague expressed regret, writing: "I appreciate that in the heat of the moment I may have misspoken when I stated that the creditors insisted on the management retention plans."
This admission follows a Guardian report suggesting that it was Thames Water executives who advocated for the retention bonuses, with all decisions ultimately resting with a board committee, as reported by .
Evidence from sources and legal documents indicates that while creditors agreed to the bonuses, they were not necessarily the instigators.
Earlier this year, Thames Water narrowly staved off insolvency after securing a contentious £3bn rescue package from creditors. The emergency funding faced challenges in both the High Court and Court of Appeal, where detractors labelled it a "get out of jail free card" for the heavily indebted water provider.
Last week, facing a grilling by MPs, Montague described the ordeal of managing the company's finances as "hair raising."
He had previously asserted that lenders had "insisted" on "very substantial" bonuses, amounting to up to 50% of salary for Thames Water's top brass, to be drawn from the emergency funds.
Defra committee publishes Thames chair's letter
The Defra committee has now made public Montague's letter acknowledging his error.
"Following the session we have been approached by The Guardian who we understand intend to write a story suggesting that we misled the committee in relation to the company's management retention plan," the letter states.
The seasoned City professional continues to defend the retention plan as "important to retain the people best placed to deliver the improved outcomes our stakeholders rightly expect during this current period of uncertainty and this was reflected in the term sheet we agreed with our creditors."
According to The Guardian, Montague is not among the executives who will receive the retention incentives.
Last week, it was reported that ministers are considering using new powers to prevent Thames Water executives from taking bonuses from the £3bn loan.
Thames Water, the º£½ÇÊÓƵ's largest water supplier serving approximately 16 million customers, has an estimated debt pile of around £18bn.
US private equity behemoth KKR is currently the preferred bidder for the takeover of the firm.
Thames Water has been contacted for comment.
