By Rachel Millard For The Daily Mail From This Is Money UK

Controversial Thames Water could soon sever its links with the Cayman Islands as it seeks to repair its reputation.

Bosses think the firm, which has paid no corporation tax for a decade, might soon be able to relocate its two subsidiaries incorporated in the tax haven.

The restructure is part of a wider rethink for England’s biggest water firm under chief executive Steve Robertson, who joined last September.

The group has been under fire, including from the industry regulator, for paying out vast dividends while loading the company up with £10billion of debt and polluting UK waterways.

Tax haven: Thames Water could soon sever its links with the Cayman Islands (pictured) as part of a wide rethink for England’s biggest water firm under chief executive Steve Robertson +1
Tax haven: Thames Water could soon sever its links with the Cayman Islands (pictured) as part of a wide rethink for England’s biggest water firm under chief executive Steve Robertson

Bosses stress the two Cayman subsidiaries are not there for tax reasons, but a source said: ‘They are cognisant of the fact that having a holding company and the word ‘Cayman’ does not look good.

They are exploring ways of being more open – addressing the corporate structure is very much a part of that.’

The Universities Superannuation Scheme, one of the UK’s largest pension funds, bought an 11 per cent stake last month and said it has ‘set out clear expectations in terms of both governance arrangements and customer service.’

Critics say holding Thames Water to account is made more difficult by its murky corporate structure of nine linked companies, including the finance company and holdings company incorporated in the Cayman Islands.

Thames Water says it paid £177million in taxes over the last year, including through national insurance, business rates, and fuel duty.

The company was bought in 2006 by Australian bank Macquarie, which shared about £1.2billion in dividends with other investors during its ownership.

It gradually sold stakes to foreign investors with the final 26.6 per cent going in May to Kuwaiti and Canadian investors.

In June water industry regulator Ofwat made an unprecedented demand for change at the company after opening a probe into why it had missed its leak targets.

Chairman Jonson Cox’s demands included ‘transparency and clarity about financial returns to the company’s investors each year.’

That same month it was fined £8.6million for missing leak reduction targets by 47million litres per day.

That followed its record £20.3million fine in March for polluting the River Thames with 1.4billion litres of raw sewage – behaviour slammed by a judge as ‘shocking and disgraceful’.

IMAGE: Tax haven: Thames Water could soon sever its links with the Cayman Islands (pictured) as part of a wide rethink for England’s biggest water firm under chief executive Steve Robertson

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