Prime Minister Dr Mahathir Mohamad has defended the YTL Group, the Malaysian conglomerate accused of making a payment to clinch the takeover of a British water company, Wessex Water.

Speaking to the Financial Times during his visit to the United Kingdom over the weekend, Mahathir said Wessex chairperson and chief executive Collin Skellet had received some money as a down payment or an advance.

"But it is something that is done in these instances," Mahathir was quoted as saying in the Financial Times 's edition yesterday.

Despite the controversial bribery allegations, Mahathir said that he did not think the incident would harm relations between the two countries.

Malaysian companies would continue to pursue investment opportunities abroad, including Britain, he added.

Arrested last month

Last month, Skellet was arrested by police on suspicion of receiving an 'illegal' payment from YTL, which bought the company for RM7.15 billion in May.

Skellet said he had received money from YTL only in respect of a five-year consultancy contract agreed with the Malaysian company following the acquisition.

According to the Financial Times , Mahathir has an intense interest in business affairs and has developed closed ties with Francis Yeoh, who is chairperson and chief executive of the YTL group, which spans the construction, property, hotel and utility industries.

However, Yeoh, who is one of Malaysia's most prominent businessmen, has been silent on the issue.

But the YTL Group has recently issued a statement to the Kuala Lumpur Stock Exchange saying that it had no knowledge of any illegal payment, the paper said.

Faith in Collin Skellet

The group expressed its faith in Skellet but promised to cooperate fully with police investigation.

Malaysian Institute of Corporate Governance director Megat Najmuddin Khas was also quoted as telling the paper that he was confident the British authorities would get to the bottom of the affair.

"Malaysians have great faith in the British legal system and British institutions. I am sure that justice will prevail," he said.

However, Megat said there seemed to be some 'ethical concerns' about Skellett's admission that he had accepted a payment for consultancy work from YTL.

He added that he doubted that Skellet would have been in a position to sway single-handedly the bid in YTL's favour in any event.