Hyflux - in recievership - update Nov 2022

Hyflux - in recievership - update Nov 2022

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Hyflux was  placed under judicial management in November 2020 , and the High Court in July 2021 approved its winding up, after the company failed to secure a white knight while it was under a debt moratorium for almost two years.

Ex-Hyflux CEO Olivia Lum, ex-CFO and four others charged with violations of Securities and Futures Act

Source:  Straits Times
Article Date:  18 Nov 2022
Author:  Grace Leong

This comes 17 months after the water treatment firm was approved to be wound up, which likely left about 34,000 investors of perpetual securities and preference shares, who had sunk in a combined $900 million, with nothing.

Hyflux’s founder and former chief executive Olivia Lum Ooi Lin, former chief financial officer Cho Wee Peng and four former board members were on Thursday charged with violations of the Securities and Futures Act.

This comes 17 months after the water treatment firm was approved to be wound up, which likely left about 34,000 investors of perpetual securities and preference shares, who had sunk in a combined $900 million, with nothing.

In a joint statement, the authorities said the six were charged over “Hyflux’s intentional failure to disclose information relating to the Tuaspring Integrated Water and Power Project”.

According to the charges, this information was necessary to avoid the establishment of a false market in Hyflux’s securities.

Lum, 61, who was handed three charges, is out on bail of $100,000.

She was charged with consenting to Hyflux omitting information relating to Tuaspring , when disclosure was required under Singapore Exchange (SGX) listing rules.

According to the charge, she consented to intentionally failing to notify SGX that the Tuaspring project was Hyflux’s expansion into a new business of selling electricity, and that the plant’s profitability was contingent on electricity sales revenue, which was projected to make up a significant proportion of its overall revenue. If convicted, she faces jail of up to seven years, a fine of up to $250,000, or both.

Lum was also charged over Hyflux’s omission to disclose the information about Tuaspring in the 2011 offer information statement issued for the offer of $200 million, 6 per cent preference shares on April 13, 2011. If convicted, she faces jail of up to two years, a maximum fine of $150,000, or both.

She was charged with an offence under the Companies Act over her failure to ensure Hyflux’s compliance with accounting standards when it disclosed its statements for the financial year ended Dec 31, 2017, at a Hyflux annual general meeting in 2018. This included failing to disclose the breach of a subsidiary’s loan agreement that permitted its lenders to demand accelerated repayment. If convicted, she faces a fine of up to $50,000.

Senior corporate finance lawyer Robson Lee noted that under the Companies Act, a company’s audited financial statements must contain enough information to give a “true and fair view” of its financial position and performance.

Cho, who is also Hyflux’s former group executive vice-president, was charged with conniving in Hyflux’s omission to disclose the information about Tuaspring. The 53-year-old, who is out on $160,000 bail, left his most recent role as CFO of real estate investment firm ESR Group on Sept 19, 2022, for health reasons.

The former Hyflux independent directors also charged with disclosure-related offences were: Teo Kiang Kok, 66; Christopher Murugasu, 63; Gay Chee Cheong, 66; and Rajsekar Kuppuswami Mitta, 65.

Hyflux Ltd had fully-integrated water solutions companies, with operations and projects in Southeast Asia, China, India, the Middle East and North Africa. Hyflux's spirit of innovation and entrepreneurship drives its technological advancements in membranes, commercialisation of applications, project management, and operations and maintenance. Hyflux is committed to providing cost-effective, reliable and sustainable solutions to its customers worldwide, from seawater desalination, water recycling, wastewater treatment, including membrane bioreactor (MBR) to potable water treatment. Hyflux's track record includes Singapore's first NEWater plant and seawater desalination plant and China's largest membrane-based seawater desalination plant in Tianjin Dagang. The company is building the world's largest membrane-based seawater desalination plant in Magtaa, Algeria and Singapore's largest MBR facility.

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