The Environment, Food and Rural Affairs (EFRA) Committee is considering whether to summon NatWest to a hearing over why it is not “intervening in this failure of corporate governance” at South East Water (SEW).

In a letter addressed to NatWest Group Pension Fund CEO, Robert Chestnutt, and NatWest Group chair, Rick Haythornwaite, Tunbridge Wells MP, Mike Martin, has also reiterated his request for a meeting with the bank, whilst pressing for financial information relating to SEW.

This follows Martin’s first letter sent last week, in which he demanded a meeting with the bank as a 25 per cent owner of SEW through its pension fund, which operates as a separate legal entity.

Martin’s latest letter is a follow-up in response to NatWest’s reply, in which it said it is in “dialogue” with SEW and will use its influence to “fully address” the issues at the water company.

Throughout December and January, SEW has been unable to supply water to thousands of homes across Kent and Sussex for extended periods due to numerous issues across the network.

As a result of these issues, which, it is argued, are due to a lack of investment in the network’s infrastructure, Martin asked Chestnutt and Haythornwaite to outline how much NatWest, its subsidiaries or connected companies “has lent to SEW, its subsidiaries, its parent company HDF (UK) Holdings Ltd, other parent companies or connected companies”.

He also asked for the rate of interest charged on each debt instrument NatWest holds concerning SEW and the contents of its dialogue with SEW.

Martin also warned that EFRA Committee chair, Alistair Carmichael, is “considering” whether to summon NatWest (and other owners) to a Select Committee hearing.

“Should you refuse to meet with me and answer my questions, I will be writing to the chair of the EFRA Committee asking him to summon you to parliament so my constituents can receive the answers they deserve,” he stated.

Speaking separately to Pensions Age, Martin explained that he is targeting the owners of SEW because they are publicly listed, unlike SEW. He wants NatWest, and its co-owners, to remove the current leadership team and send in a transformation team.

He also believes NatWest’s pension fund members would likely be “horrified” by the situation, noting that there will probably be “people who live in Tunbridge Wells who are in receipt of a NatWest pension and also not in receipt of water”.

Martin answered “certainly” when asked if this could be a test case for whether large pension fund investors can be responsible stewards of essential public infrastructure.

“It is also test case for whether the Water Services Regulation Authority (OFWAT) will strip a licence off a water company. If they lose their licence the value of their investment falls to zero instantly,” he added, noting the incentive for NatWest to intervene.

In a separate letter, addressed to all three owners of SEW, which includes NatWest along with Utilities of Australia and The Fédération des caisses Desjardins du Québec, he urged them to act now before it’s too late.

He told the investors that they "need to face the reality that this failing business is now not only a threat to your reputation – but also your bottom line".

“Without its licence SEW is worthless and you would have no choice but to sell its assets to another provider at a significant discount,” Martin stated.

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