SINGAPORE – Troubled water treatment firm Hyflux is under criminal investigation for false and misleading statements, as well as non-compliance with accounting standards, the authorities said on Tuesday (June 2).
The investigation, which also involves the company’s existing and former directors, follows a review of Hyflux-related disclosure and compliance with accounting and auditing standards which began in April 2019.
The review, conducted by the Monetary Authority of Singapore (MAS), the Accounting and Corporate Regulatory Authority (Acra) and the Singapore Exchange Regulation, surfaced reasons to suspect that several offences may have been committed, the authorities said.
The joint investigation undertaken by Acra, MAS and the police’s Commercial Affairs Department will ascertain if there were lapses in the company’s disclosures concerning the Tuaspring integrated water and power project, as well as non-compliance with accounting standards between 2011 and 2018.
Among the directors under investigation are Hyflux’s executive chairman, Ms Olivia Lum, who was the company’s only executive director during that period, and non-executive independent director Gay Chee Cheong, who was appointed to the company’s board in 2001.
Several other board members being investigated are current lead independent director Teo Kiang Kok and non-executive independent directors Lee Joo Hai and Christopher Murugasu, who have been on Hyflux’s board for more than 10 years and were serving as board directors during the period between 2011 and 2018.
The CAD, MAS and Acra have obtained accounting and other corporate records from Hyflux and its subsidiary Tuaspring as part of their investigation.
The company’s directors and key officers involved in the Tuaspring project have also been interviewed, the authorities said.
The time needed to complete the investigation depends on several factors, including the complexity of the issues and number of subjects involved, and the agencies will provide an update when there is an outcome to the investigation, they noted.
The authorities said that the criminal investigations are separate from Hyflux’s ongoing corporate rescue, and are not intended to interfere with the company’s reorganisation plans.
In a bourse filing on May 29, Hyflux said its $400 million rescue deal with potential investor Utico has ceased with the lapsing of the restructuring agreement’s long-stop date on May 26, and that it is considering other restructuring options.
This includes potential white knights such as Singapore-based Aqua Munda and Longview International Holdings, and Spain-based water management company FCC Aqualia.