UK sewage scandals put Hong Kong billionaire in firing line

When Hong Kong billionaire Li Ka-shing’s CK Group agreed to sell a 25 percent stake of its UK-based water company to New York-listed investment giant KKR, the investment was enthusiastically received in financial circles across Asia.

In the parts of the UK where Northumbrian Water Limited (NWL) operates, news of the $1bn deal prompted fury.

NWL, which provides water and sewerage services to 2.7 million people in northeast England and is jointly owned by Li’s CK Hutchison, CK Asset and CK Infrastructure, has faced backlash over its record of dumping raw sewage into the region’s waterways.

The company has racked up 780,000 British pounds ($896,000) in fines for environmental violations since 2021 alone and was among 11 UK water companies last month ordered to lower customers’ bills to the tune of 150 million pounds ($172m) for failing to meet pollution targets.

“I think in the end this will turn out to be the biggest-ever scam inflicted on the people in the UK, with NWL laughing all the way to the bank,” Bob Latimer, a veteran anti-pollution campaigner in Whitburn, told Al Jazeera.

Latimer, who has been battling NWL since 1996, lives adjacent to a NWL outfall, which he says discharged a record 820,000 tonnes – the equivalent of 325 Olympic-size swimming pools – of untreated sewage into the sea near his home, in 2021.

As a privatised monopoly with secure assets to borrow against and a captive customer base, water companies in England like NWL have long been considered a safe bet for international investors, including those in Asia.

But well-publicised sewage pollution scandals in the UK have provoked widespread media attention, public anger and political condemnation.

As a result, the regulatory and political environment in the UK is changing fast, presenting new risks and the prospect of significant reputational damage for Li, one of Asia’s richest tycoons, and his CK Group.

While the 94-year-old Hong Kong-based tycoon is feted by politicians in greater China as a “superman” for his influence and outstanding business and philanthropic achievements, Li, who formally retired in 2018 but remains involved in the companies as an adviser, attracts a decidedly cooler response in northeastern England.

NWL, which provides water and sewerage services to 2.7 million people in northeast England and is jointly owned by Li’s CK Hutchison, CK Asset and CK Infrastructure, has faced backlash over its record of dumping raw sewage into the region’s waterways.

The company has racked up 780,000 British pounds ($896,000) in fines for environmental violations since 2021 alone and was among 11 UK water companies last month ordered to lower customers’ bills to the tune of 150 million pounds ($172m) for failing to meet pollution targets.

“I think in the end this will turn out to be the biggest-ever scam inflicted on the people in the UK, with NWL laughing all the way to the bank,” Bob Latimer, a veteran anti-pollution campaigner in Whitburn, told Al Jazeera.

Latimer, who has been battling NWL since 1996, lives adjacent to a NWL outfall, which he says discharged a record 820,000 tonnes – the equivalent of 325 Olympic-size swimming pools – of untreated sewage into the sea near his home, in 2021.

As a privatised monopoly with secure assets to borrow against and a captive customer base, water companies in England like NWL have long been considered a safe bet for international investors, including those in Asia.

But well-publicised sewage pollution scandals in the UK have provoked widespread media attention, public anger and political condemnation.

As a result, the regulatory and political environment in the UK is changing fast, presenting new risks and the prospect of significant reputational damage for Li, one of Asia’s richest tycoons, and his CK Group.

While the 94-year-old Hong Kong-based tycoon is feted by politicians in greater China as a “superman” for his influence and outstanding business and philanthropic achievements, Li, who formally retired in 2018 but remains involved in the companies as an adviser, attracts a decidedly cooler response in northeastern England.