The criminal investigation into accounting practices at Hyflux may centre on the possibility that disclosures by current and former directors around securities offerings were inadequate and that there may be irregularities in the water firm's financial records, industry observers say.

Speculation has been rife since the Commercial Affairs Department, the Monetary Authority of Singapore and the Accounting and Corporate Regulatory Authority announced on Tuesday that a joint probe had been launched after the findings of a review over concerns over Hyflux's compliance with accounting and auditing standards and disclosure rules.