Hyflux’s former chief executive officer (CEO), chief financial officer (CFO) and four independent directors were charged in court on Nov 17 for disclosure-related offences under the Securities and Futures Act (SFA). CEO Lum Ooi Lin (also known as Olivia Lum) was also charged with an offence under the Companies Act (CA).
This came after joint investigations carried out by the Commercial Affairs Department (CAD) of the Singapore Police Force (SPF), the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA).
CEO Lum was charged with one count under the SFA’s section 203(2) read with section 331(1) for consenting to Hyflux’s deliberate failure to release information relating to the Tuaspring integrated water and power project even though such disclosures were required under the listing rules of the Singapore Exchange (SGX).
She was charged with another count under the SFA’s section 251(1)b read with sections 253(4)(b)(i) and 277(3) for Hyflux’s omission to state the same information relating to Tuaspring in its offer information statement (OIS) in 2011. The OIS was issued for the offer of $200 million for 6% preference shares on April 13, 2011.
Lum was further charged with one count under the CA’s section 201 (5) read with section 204(1) for failing to ensure Hyflux’s compliance with accounting standards for its financial statements for the FY2017 ended Dec 31, 2017. This included the failure to disclose the breach of a subsidiary’s loan agreement that permitted its lenders to demand accelerated repayment.
CFO Cho Wee Peng was charged with one count under the SFA for “conniving” in Hyflux’s intentional failure to disclose information relating to Tuaspring.
See also: Hyflux saga: Lessons for companies and investors
The four independent directors, Teo Kiang Kok, Gay Chee Chong, Murugasu Christopher and Rajskar Kuppuswami Mitta, were each charged one count under the SFA for neglecting to disclose any information relating to Tuaspring. They were also charged one count under the SFA for failing to state the same information in Hyflux’s 2011 OIS.
If convicted, the accused face the possibility of imprisonment of up to seven years, a fine not exceeding $250,000, or both on each charge under the SFA section 203; imprisonment of up to two years, a maximum fine of $150,000 or both on each section 253 SFA charge, and a maximum fine of $50,000 on the charge under the CA.
Further to its statement, the authorities revealed that they have also investigated DBS Bank for its role as issue manager in the 2011 OIS offer.
The outcome of ACRA’s inspection on the audits conducted by Hyflux’s auditors, KPMG, will also be finalised in due course.
