Former Hyflux CEO Olivia Lum, ex-CFO and 4 independent directors charged with disclosure offences relating to Tuaspring project

SINGAPORE — Former Hyflux chief executive officer Olivia Lum Ooi Lin was charged on Thursday (Nov 17) with disclosure-related offences and her failure in ensuring that the water treatment company was compliant with accounting standards.

In a joint news release, the police, the Monetary Authority of Singapore and the Accounting and Corporate Regulatory Authority said that the company’s former chief financial officer Cho Wee Peng, and four independent directors of Hyflux, were also charged with similar offences.

Lum faces two charges relating to the Tuaspring Integrated Water and Power Project, in which she allegedly consented to Hyflux's "intentional failure" to disclose information relating to the project as required by Singapore’s exchange listing rules.

Another charge is related to Hyflux’s omission to state the same information on the project in a 2011 offer information statement. The statement was issued for the offer of S$200 million, 6 per cent preference shares on April 13 in 2011.

In addition, Lum also faces another charge under the Companies Act. She is accused of failing to ensure that Hyflux made disclosures required under the accounting standards for its financial statements for the financial year ended December 2017.  

This included the failure to disclose the breach of a subsidiary’s loan agreement that permitted its lenders to demand accelerated repayment, the joint statement said.

As for Cho, he faced similar charges relating to Tuaspring for his alleged role in the company’s intentional failure to disclose information relating to the project.

Four independent directors of Hyflux — Teo Kiang Kok, Gay Chee Chong, Murugasu Christopher and Rajskar Kuppuswami Mitta— face similar charges as well.

Once a stock market darling and touted as a trailblazer in Singapore's entrepreneurial space, Hyflux’s fall from grace began on May 22, 2018, when it announced that it was seeking court protection to reorganise its business and deal with its liabilities. It also suspended trading of its shares and related securities.

In 2019, the authorities conducted a review of Hyflux-related disclosure issues and the firm’s compliance with accounting and auditing standards.

The authorities then launched an investigation in 2020 to ascertain if there had been lapses in Hyflux’s disclosures concerning the Tuaspring Integrated Water and Power Project as well as checking for any non-compliance with accounting standards between 2011 and 2018.

If convicted, the accused persons face imprisonment of up to seven years or a fine of up to S$250,000, or both, for each charge of failing to disclose information as required under the Singapore's exchange listing rules.

The maximum penalty for omitting the information is a jail term of up to two years or a fine of up to S$150,000, or both.

Anyone found guilty under the Company Act for failure to ensure accounting standards compliance can be fined up to S$50,000.