Ofwat investigates whether Thames Water dividend is licensing breach

Exclusive: Debt-laden water company says it has paid £37.5m dividend from operating company

The water industry regulator is investigating whether Thames Water has breached the conditions of its licence by paying a dividend, as executives face the prospect of being recalled before MPs over financial concerns.

In announcing half-year results on Tuesday, Thames Water said it had paid a £37.5m dividend from its operating company – which is regulated – that ultimately reached a holding company. Thames said the money was used to service “external debt obligations” of the holding company and one of its subsidiaries.