Soldato
£20m fine but who will end up paying?
Andi.
Andi.
Thames Water
- Thread starter andicole0
- Start date
Soldato
You're paying?
Soldato
Thames water the private limited company?
I imagine their shareholders will take a small hit or maybe their customers if they think they can squeeze more cash out from them to cover the losses. 20m is a lot but compared to what the company turns over and the severity of these spills, it isn't as great as you might think.
Maybe it was the fish who paid the real price RIP
Who do you think should be made to pay?
I imagine their shareholders will take a small hit or maybe their customers if they think they can squeeze more cash out from them to cover the losses. 20m is a lot but compared to what the company turns over and the severity of these spills, it isn't as great as you might think.
Maybe it was the fish who paid the real price RIP
Who do you think should be made to pay?
Don
More than likely the customers will pay though increased water bills.
Soldato
Like any business really. Company gets an increased expense and if big enough, either budget cuts or price increases to cover if possible.
How does that work - I thought water bills were subject to price controls? And why would they do that for 20 million?
Associate
Just thinking about this - pity the court can't force them to issue shares to the value of £20m, and then sell them. That way the shareholders are punished and will take out their ire on the Directors. The Directors are punished as they probably hold shares/options and their holdings are diluted. The company doesn't get a tax deduction on the fine. Best of all, since there's no P&L hit there's no massive impetus to try and claw it back from customers (well, none more so than usual profit maximization motives)
I feel like I've had a genius brainwave. I'll wait to get shot down shortly...I'll just find my parachute
I feel like I've had a genius brainwave. I'll wait to get shot down shortly...I'll just find my parachute
Soldato
I believe their water charges are heavily controlled but if they find the 20m dent big enough, they will probably include that spread across a things like large water infrastructure projects which are big money and few other competitors (though as i said, compared to the damage and the size of Thames water, it is small money)
Imo, the main problem with it is that they seem to have made a conscious decision to release the sewage into the river system.
They must have known they'd get caught, I imagine they probably did the old cost analysis thing and worked out the fine would be cheaper than the cost to treat the sewage (or whatever other problem they had that releasing the sewage into the river system fixed).
They must have known they'd get caught, I imagine they probably did the old cost analysis thing and worked out the fine would be cheaper than the cost to treat the sewage (or whatever other problem they had that releasing the sewage into the river system fixed).
Caporegime
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- 30 Jul 2013
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They had an operating profit of £742 million in 2015/16 so I think they can suck it up.
it doesn't make any sense, as if because you lost 20 million one year you'll try extra hard to make exactly 20million more the next year... I mean if they were/are able to push for a bit more profit then they should be doing that regardless
should be prosecuting the individuals making that decision in that case and giving them personal fines and/or prison sentences
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Soldato
I get what your saying but when you have huge infrastructure contracts with the government going on and few other people who could replace you as a company, then i suppose you can always ask for more to an extent.
I can agree with prosecuting individuals and it may well have been in discussion in court but there is likely some difficulties when discussing accountability and responsibility. Well, if you make an example of enough people, it makes others think twice.
I can agree with prosecuting individuals and it may well have been in discussion in court but there is likely some difficulties when discussing accountability and responsibility. Well, if you make an example of enough people, it makes others think twice.
why do you need an additional reason to do that?
Soldato
A less heavy handed pricing approach may yield for longer contracts, more money or future contracts but a heavy handed approach may please shareholders immediately and alleviate any fears they have
Associate
Customers no doubt...
we're talking about a 20 million fine, they made 740 million last year...
it just doesn't make much sense
can you explain how please?
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Soldato
I didn't think it would scare them, was just mentioning why a company may choose a less aggressive pricing strategy. I did say that 20m was small money for Thames Water, my pointing to shareholders and infrastructure project pricing was on the condition IF they found the dent big enough.
Associate
Loss of revenue due to fine, customers premiums are increased to cover the costs.
Further info for anyone interested... https://www.gov.uk/government/news/thames-water-ordered-to-pay-record-20-million-for-river-pollution
By premiums you mean bills that are subject to price controls from the regulator?