Thames Water has long argued that it has not paid out a dividend to external shareholders since 2017, stressing in its latest business plan that it will not reward them with payouts before 2030.
However, it has continued to filter payments to Kemble, which is teetering on the brink after defaulting on its debt earlier this month.
Ofwat, which makes no distinction between internal and external dividends, has previously announced powers to block payouts if a water company’s financial health is at risk.
These new powers have enabled closer scrutiny of Thames Water, which has been lobbying the Government and Ofwat to let it pay dividends and raise bills.
Chancellor Jeremy Hunt has already criticized the company’s rescue plans, as he said earlier this month that investors in the company have “an obligation to sort out the mess.”
An Ofwat spokesperson said: “Since October we have been in discussions with all companies, checking on their proposed plans and seeking further information.
“There has also been further information published in the last few months clarifying companies’ statutory commitments.
“Both these factors have required companies to review their proposed plans and revise their expenditure forecasts to reflect what would be required to fully comply with all statutory requirements.
“We note that Thames Water has now published an update to its business plan. “We will publish our draft view on companies’ plans on June 12.”
A Kemble spokesperson said: “Shareholders committed to supporting a further £3.25bn of investment on top of the £500m provided last year.
“They pledged not to take any dividends out of the business for themselves until a turnaround was delivered, and not before 2030. Any dividends paid by Thames would be used solely to finance the debt required to support the investment in the network.”
Thames Water declined to comment.
