Recommendation 4

Those who are truly in control of a water company should be subject to appropriate checks and oversight. Future regulation must recognise the control that creditors can exert over a company facing insolvency and ensure that Ultimate Controller safeguards apply to them when they become, or are likely to become, economic owners in practice. Regulators or the company should be required to carry out appropriate due diligence checks on the suitability of all prospective owners and controllers of water companies, whether they are shareholders or creditors, to inform any future powers to block changes in control. (Recommendation, Paragraph 23)