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Ex-CEO of Singapore's Hyflux charged in court

An image showing a judge's gavel, scales, hourglass and books, to illustrate a story on the ex-CEO of Hyflux being charged in court.
The former chief executive officer of Hyflux Ltd was charged in court on Thursday (17 November) for disclosure-related offences under the Securities and Futures Act (SFA). (PHOTO: Getty)

SINGAPORE – The former chief executive officer of Hyflux Ltd was charged in court on Thursday (17 November) for disclosure-related offences under the Securities and Futures Act (SFA).

In a joint statement on Thursday, the Singapore Police Force (SPF), Monetary Authority of Singapore (MAS) and Accounting and Corporate Regulatory Authority (ACRA) said that besides founder Lum Ooi Lin, also known as Olivia Lum, the company's chief financial officer Cho Wee Peng, and four independent directors of Hyflux at the material time, were also charged in court.

Lum was further charged with an offence under the Companies Act (CA) for her failure in ensuring Hyflux's compliance with accounting standards, the authorities said.

The charges followed joint investigations carried out by the Commercial Affairs Department of the SPF, MAS and ACRA.

The charges are:

Against Lum

  • One count of section 203(2) read with section 331(1) SFA, for consenting to Hyflux's intentional failure to disclose information relating to the Tuaspring Integrated Water and Power Project, when such disclosure was required under the Singapore Exchange listing rules.

  • One count of section 253(1)(b) read with sections 253(4)(b)(i) and 277(3) SFA for Hyflux's omission to state the same information relating to Tuaspring in the 2011 Offer Information Statement (2011 OIS). The 2011 OIS was issued for the offer of S$200 million, 6 per cent preference shares on 13 April 2011.

  • One count of section 201(5) read with section 204(1) CA for failing to ensure that Hyflux made disclosures required under the accounting standards for its financial statements for the financial year ended 31 December 2017. This included the failure to disclose the breach of a subsidiary's loan agreement that permitted its lenders to demand accelerated repayment.

Against Cho

One count of section 203(2) read with section 331(1) SFA for conniving in Hyflux's intentional failure to disclose information relating to Tuaspring, when such disclosure was required under the listing rules.

Against four independent directors of Hyflux (Teo Kiang Kok, Gay Chee Chong, Murugasu Christopher and Rajskar Kuppuswami Mitta)

  • One count each of section 203(2) read with section 331(1) SFA, for their neglect in connection with Hyflux's intentional failure to disclose information relating to Tuaspring, when such disclosure was required under the listing rules.

  • One count each of section 253(1)(b) read with sections 253(4)(b)(i) and 277(3) SFA, for Hyflux's omission to state the same information in the 2011 OIS.

If convicted, the accused persons face imprisonment of up to seven years, a fine not exceeding S$250,000, or both, on each section 203 SFA charge; imprisonment of up to two years, a fine of not exceeding S$150,000, or both, on each section 253 SFA charge; and a fine not exceeding S$50,000, on the CA charge.

Roles of DBS Bank and KPMG

The authorities have also, in relation to the 2011 OIS, investigated DBS Bank Ltd under section 253(4)(d) of the SFA for its role as issue manager in the offer. After reviewing the evidence, no further action will be taken.

The authorities added that the outcome of ACRA's inspection on the audits conducted by KPMG, the auditors of Hyflux, will be finalised in due course.

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