Accusations of Underreported Debt

Cedric Gomes, a chartered professional accountant and unsuccessful candidate for London Hydro’s board, has raised concerns with the city council regarding the utility’s financial statements. In a letter dated May 23, 2024, Gomes alleges that London Hydro underreported its debt by approximately $32 million in its 2022 financials. According to Gomes, the debt previously disclosed as $168 million should actually be valued around $200 million, suggesting a significant discrepancy in the reported figures.

London Hydro’s Response

CEO’s Rebuttal

Vinay Sharma, CEO of London Hydro, firmly denies the accusations, asserting that there has been no change in the debt figures between the 2022 and 2023 financial statements. Sharma explains that a debt swap agreement with a bank fixes the repayment amount (principal plus 2.15% interest) over the agreement’s term. He emphasizes that the annual financial reports reflect the impact of fluctuating interest rates at specific points in time, but the total repayment amount remains unchanged at $200 million.

Consistency in Reporting

Sharma insists on the consistency of London Hydro’s debt reporting over the years, challenging Gomes’ claim of improper accounting practices. He clarifies that the $200 million debt figure has been consistently reported, countering the notion that there was a significant adjustment or lack of transparency in the financial documents.

The Debate Continues

Gomes calls for greater transparency and accountability from London Hydro, especially given the utility’s role as a significant contributor to the municipal budget through its annual dividend. The city council, as the sole shareholder of London Hydro, is urged to ensure that the utility’s financial reporting processes are both transparent and accountable.The dispute highlights the complexities of financial reporting and the importance of clear communication between public utilities and their stakeholders. As the debate unfolds, the focus remains on ensuring that London Hydro’s financial practices meet the necessary standards of accuracy and transparency.