For a water utility, there can be few crimes so heinous - other perhaps than poisoning the water supply - than deliberately misleading the regulator so as to gain a more favourable price review. The failure in internal controls that allowed this to happen at Severn Trent is a cause of some shame for the company's then directors, and now considerable financial damage to its shareholders.
On top of the £42m overcharge which the regulator is ordering be rebated to customers for the years 2005-10, the company faces a fine of at least this order of magnitude again once a separate investigation by the Serious Fraud Office has been completed.
What on earth persuaded some of Severn Trent's most senior managers to engage in such deceit? At this stage, it remains something of a mystery. Was it the prospect of bumper bonuses, or simply a misplaced desire to improve the bottom line?
Whatever the explanation, those higher up the feeding chain in the water unit's holding company have plenty to answer for too. Although not directly implicated in the scam, which involved dodgy income data and inflating the size of the company's bad debt experience, main board directors cannot escape blame for the lack of management control which allowed it to happen.
They would certainly be damned if they did know, but are scarcely less damned for not knowing either, for they were plainly presiding over an unruly ship. And those directors were? The chief executive was Robert Walker, who is today chairman of WH Smith. More worrying still, the chairman was David Arculus, now president elect of the CBI.
Ofwat's report states that there is no evidence the holding company directors were party to these failures, yet if not them, then just who is responsible? The dogs may bark, but the caravan moves on.
Vodafone: now there's a fine old mess
The penalties for failure in any attempted putsch are generally extreme: summary execution. So how come Sir Christopher Gent still clings to the position of life president at Vodafone, having tried and failed to oust his successor as chief executive, Arun Sarin? Created to appease the ego of the retiring emperor, the position of life president is nearly always a mistake.
Though technically gone, the life president continues to sit, like Banquo's ghost, at the top table, a brooding and sometimes disruptive presence who, with a reassuring nod or eyebrow raised in surprise, approves or disapproves all that takes place.
Sir Chistopher was there at Vodafone's birth, and was subsequently responsible for building the company into the global colossus it is today. The tidal wave of bad news that seems to have engulfed Vodafone since Mr Sarin took over is in reality no more than a reaction to the overly exuberant expansion of the past. But to Sir Christopher, his own departure and the company's subsequent fall from grace must seem like more than just coincidence.
In an attempt to remedy matters, he's already tried to put his own non-executive on the board. It now emerges that he's also threatened to vote against Mr Sarin's reappointment.
Sir Christopher may or may not be right about Mr Sarin; there's certainly support in the City for the view that Mr Sarin is not the right man for the job. Little progress seems to have been made in exploiting the global reach and power so expensively acquired by Vodafone. Under pressure from investors, the company is being forced into a partial break-up.
Yet to interfere from beyond the grave, as it were, is not just a breach of corporate etiquette. It is also completely unacceptable behaviour from one who counts himself among the great and the good of British industry. The contrast with the statesmanlike behaviour of Sir Ernie Harrison, who most would have forgotten is joint life president with Sir Christopher, could hardly be greater. Sir Ernest remains studiously uninvolved, turning up only at parties to recount anecdotes from past glories.
Sir Christopher would be appalled at the prospect of such interference at GlaxoSmithKline, where he is now chairman. Likewise, Lord MacLaurin, Vodafone's chairman, wouldn't dream of trying to influence the affairs of Tesco, where as executive chairman he was responsible for laying the foundations for the phenomenal success story the company is today.
With the board in such apparent disarray, it's hard to know what to suggest. Little would be gained by forcing Lord MacLaurin to stand down early; he leaves in four months' time anyway, when he will be replaced by the redoubtable Sir John Bond, retiring chairman of HSBC. Nor would there be much point in stripping Sir Christopher of his life presidency, even if he perhaps deserves it. The board's best hope is that things just subside.
The job of managing Vodafone after the glory years of imperial expansion was always bound to be a difficult one, fraught with disappointments. Mr Sarin has done as well as could be hoped in bringing expectations back into line with reality. With the likely sale of Japan, there's even evidence of him getting back on to the front foot.
As for the US mobile assets, there's no appetite on the board for selling out to the company's American partner, Verizon. One possible way out of the impasse would be to follow AT&T and BellSouth into a full-scale merger, though this would be very much at odds with Vodafone's strategy of remaining a pure mobile play.
Yet business models are changing fast in the communications industry, with the emergence of companies offering the quadruple play of fixed line, broadband, pay TV and mobile. An outright merger is not to be completely discounted, even if, as the smaller of the two companies, it's not something that Verizon would necessarily welcome. Now there's something Sir Christopher would approve of - a $100bn hostile bid on American soil. It would be just like old times.
BAA: a case of strategic assets?
"Every nation must try to protect industries it considers strategic," Spain's industry minister, Jose Montilla, said yesterday in response to demands from Brussels that it stop trying to block a takeover bid for one of Spain's largest energy suppliers, Endesa, from E.ON of Germany.
The double standards from a country which has provided specific tax breaks so that its own companies can buy abroad is quite breathtaking.
No such barriers were erected when Spain's Banco Santander bid for Abbey National, or when Telefonica acquired O2. Even Spain might struggle to categorise these companies as "strategic assets", but one industry where there wouldn't be any doubt would be airports, so much so that in Spain the major ones are all still state-owned.
Will the British government take a similar stance if Grupo Ferrovial plucks up the courage to bid for BAA? Ferrovial's chairman, Rafael del Pino, is gambling that Britain's open door policy to inward investment means that it will not, but I wouldn't be so sure. I doubt ministers yet know what they think on these matters, yet the regulator, the Civil Aviation Authority, already seems greatly concerned that high levels of debt leverage in any bid might damage BAA's ability to finance its future investment commitments.
Yet while ministers and regulators can sound off all they like about the importance of strategic assets, BAA would itself be most unwise to play this card. The only thing the owners of BAA are concerned about is shareholder value; any attempt to obstruct it would be regarded as a form of betrayal. If directors were to peddle the argument at all, they would have to be absolutely certain that the regulator would back and protect them, for they could expect little mercy from the City if the strategy failed.
The last chief executive to play the public interest argument was Ian Harley of Abbey National in the face of a bid from Lloyds TSB. The City never forgave him for it, and small wonder after the meltdown in the company's affairs that soon occurred.Reuse content