If British police are coming to town to investigate allegations of bribery surrounding utilities company Wessex Water, then only they and the British press know about it up to now.

Relevant authorities contacted in Kuala Lumpur were in the dark as to a reported visit by British police to investigate allegations that a bribe was used to facilitate YTL Power's purchase of Wessex Water in March.

Colin Skellett, chief of Wessex Water, was arrested in Britain on Wednesday for allegedly receiving almost 1 million pounds sterling (RM5.7 million) as an inducement when YTL Power entered its bid to take over the company.

YTL Power bought the company from Azurix Corp, owned by bankrupt energy trader Enron, for about 1.24 billion pounds sterling (RM7.15 billion).

Unaware of investigations

In Kuala Lumpur, the British High Commission was unaware of any plans by the British police to extend its investigations here.

The British press had reported that investigators were preparing to fly to Kuala Lumpur as well as to Azurix's base in Houston.

John Marshall, head of political, economic and public diplomacy at the British High Commission, said he has not heard anything directly from the British police and that he had only seen press reports on the issue.

ASP Shamsuddin Ali of the Bukit Aman media desk also said he did not have knowledge of any intention by the Fraud Squad of the City of London Police to conduct investigations in Kuala Lumpur.

The Malay Mail yesterday reported sources saying that the British police had contacted their Malaysian counterparts to help them get in touch with the people they want to meet.

YTL Power is a subsidiary of YTL Corp, of which 46 percent is owned by the Yeoh Tiong Lay family. The company is led by Francis Yeoh, son of the founder, and is said to have a net worth of about RM5.5 billion.

Last Friday, YTL Power issued a brief statement to local media denying knowledge of any illegal payment. It said that it has offered British police its full co-operation in the investigation. YTL Power has not made any other statement on the allegations since then.

Skellett may sue

Meanwhile, Skellett has reportedly expressed his intention to sue the City of London Police over his arrest, as soon as investigations are completed.

Throughout the weekend, Skellett maintained that he had not played any part in the sale of Wessex, and that financial advisers to the sale could confirm his innocence.

In explaining how the money ended up in his Barclay Bank account, Skellett said he had told the police that the payment was for a five-year consultancy contract with YTL Power.

He further explained that the money had been paid in advance, rather than staggered over five years, because Hong Yeoh, a member of the Yeoh family who led the Wessex purchase, felt that a payment up-front would commit him (Skellet) to stay on for the duration of the consultancy.

A second man arrested after he volunteered himself to British police last Wednesday has since been identified as Martin Bushnell.

According to the Financial Times, Bushnell is a British citizen and a resident of Thailand. He is an employee of the Yeoh family and is suspected to have been involved in channelling the payment to Skellett.

Best of bids

Schroder Salomon Smith Barney, the US investment bank which had advised the sale, was reported in The Times last week as saying that no irregularities had ever taken place during the purchase and that "YTL offered the best bid in terms of price, timing, and caveats."

It added that YTL Power's purchase was made without the knowledge of Skellett.

YTL Power purchased Wessex in a deal widely considered controversial by observers. A consortium led by the Royal Bank of Scotland was about to close the deal with Azurix, when YTL Power re-entered the auction at the eleventh hour.

YTL Power also faced two bigger competitors Hong Kong billionaire Li Ka Shing's Cheung Kong Infrastructure and Italian utility Enel.

The Telegraph in Britain quoted a source as saying that the Royal Bank of Scotland lost out when Azurix's chief Michael Anderson became impatient with its concerns over liabilities that could arise from Enron's collapse.

Wessex was placed on the auction block at the height of parent company Enron's collapse last October due to alleged accounting fraud.

Anderson was reported to have invited YTL Power to make a last-minute bid. According to The Telegraph, "Anderson contacted YTL by telephone and told the Malaysians that the UK water company was theirs if they matched RBS's price."

A Guardian report last Friday revealed that Cheung Kong was thought to have considered legal action on the way the bid was conducted. Since YTL had been invited to make a counter-offer, Cheung Kong thought that it should also have been allowed to make a second bid.

Wessex was considered key to YTL Power's plans to enter Europe's energy sector. However, the expectation that Wessex would bid for large water services contracts in Europe after the takeover failed to materialise when privatisation plans were scrapped.