The former boss of Southern Water is among four of the water firm’s ex-employees set to face criminal proceedings for conspiracy to defraud.

The Environment Agency (EA) alleges that between January 2012 and December 2017 Matthew Wright helped manipulate the operator self-monitoring testing regime by implementing “artificial no-flow events” at wastewater treatment works. The government said the individuals allegedly falsified data to bypass compliance checks and defrauded the EA and Ofwat.

Wright, who led the water agency from 2011 to 2016, had previously launched a legal challenge arguing the EA lacked the legal power to issue the summons. But on Wednesday the Administrative Court dismissed the claim.

The court confirmed the EA’s authority to prosecute and cleared the way for the case to be heard at Medway Magistrates’ Court.

The two High Court judges also ruled that restrictions previously preventing reporting of the legal challenge should be lifted.

The operator self-monitoring system was introduced for the water industry in 2009 and requires water companies to take samples at their wastewater treatment works and report the results to the EA.

It is an offence if there is evidence that flows or data are deliberately manipulated to avoid compliance checks. The charge the individuals face carries a maximum penalty of 10 years in prison.

An EA spokesperson said: “We take our responsibility to protect the environment very seriously and will always pursue and prosecute those alleged to have committed serious offending against the environment. We welcome this important judgment.”

Southern Water will separately face charges of allegedly breaching environmental permits linked to the same conduct.