The chief of YTL Power-owned Wessex Water has been arrested in the United Kingdom on suspicion of receiving a bribe of almost one million pounds sterling (RM5.7 million) during YTL Power's bid to take over the company.

According to London-based The Guardian and wire reports, chairperson and chief executive officer Colin Skellett was picked up by British police yesterday for allegedly receiving a bribe during YTL Power's takeover of the company from Enron's Azurix Corp for about 1.24 billion pounds sterling (RM7.15 billion).

YTL Power has since issued a statement to the British media denying knowledge of any illegal payment. It said that it has offered British police its full cooperation in the investigation.

It was also reported that another man, who gave himself up to the City of London police fraud squad after hearing the news of Skellet's arrest, has been arrested. His identity has not been revealed.

Fraud squad head Detective Superintendent Ken Farrow, was reported as saying that police inquiry is centred on the "actions of one particular individual at Wessex Water and this person's relationship with the Malaysian company that acquired control of Wessex Water".

Farrow added that the second man has no direct connection with Wessex Water but was arrested for his alleged role as an intermediary to the questionable payment.

Controversial eleventh-hour deal

In March, YTL Power purchased Wessex in a deal widely considered controversial by observers, as it had entered the auction at the eleventh hour and was running against two other bigger bidders Hong Kong billionaire Li Ka Shing's Cheung Kong and Italian utility Enel.

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

Wessex Water supplies drinking water to about 1.2 million people and sewerage services to 2.5 million people in the south-west of England. Its pre-tax profit in the 12 months to March 31 was 84.3 million pounds sterling (RM486 million), six per cent down on the previous year. The expectation that Wessex would bid for large water services contracts in Europe after the takeover failed to materialise when privatisation plans were scrapped.

YTL Power is a subsidiary of construction conglomerate YTL Corp, of which 46 percent belongs to the Yeoh family. The company is led by Francis Yeoh, son of founder Yeoh Tiong Lay, said to have a net worth of about RM5.5 billion. According to the Financial Times , Hong Yeoh, another son, is understood to have carried out most of the negotiations for the Wessex purchase.

YTL Power is expected to come out with a statement later today.