Pakistan, May 28 -- LONDON - Thames Water has been hit with a record-breaking £123 million fine by the UK's water regulator, Ofwat, after serious failures in handling sewage and breaking dividend rules. The fine includes a £104 million environmental penalty and an additional £18.2 million for distributing dividends despite poor performance.

The regulator confirmed that the fine will be paid by the company and its investors, not by customers. Ofwat chief executive David Black said the decision holds Thames Water accountable for its past failures and sets clear expectations for future conduct. He also emphasized that dividend payments must be tied to performance.

Thames Water was found to have caused significant environment...