Troubled water treatment firm Hyflux is under criminal investigation for suspected false and misleading statements, as well as non-compliance with accounting standards, the authorities said yesterday.
The investigation, which also involves the company's existing and former directors, follows a review of Hyflux-related disclosures and compliance with accounting and auditing standards that was announced in April last year.
The review, conducted by financial regulators Monetary Authority of Singapore (MAS), the Accounting and Corporate Regulatory Authority (Acra) and Singapore Exchange Regulation, uncovered reasons to suspect that several offences may have been committed.
The joint investigation undertaken by Acra, MAS and the police's Commercial Affairs Department (CAD) will ascertain if there were lapses in Hyflux'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 is Hyflux's executive chairman, Ms Olivia Lum, who was the company's only executive director during that period.
Other board members being investigated include current lead independent director Teo Kiang Kok and non-executive independent directors Gay Chee Cheong, Lee Joo Hai and Christopher Murugasu, all of whom were also serving as board directors during the years under probe.
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 Tuaspring project, which includes the desalination plant now operated by national water agency PUB, had cost Hyflux $1.05 billion and had been a drag on the company's earnings since it began operations in March 2016.
The authorities said they will provide an update when there is an outcome to the investigation.
They added 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 yesterday, Hyflux said it will make further announcements as and when there are updates on the investigation.
Singapore-based Aqua Munda, one of the potential white knights Hyflux has been in discussions with, reiterated its interest in a letter yesterday in acquiring Hyflux's unsecured debts and completing the beleaguered water treatment firm's debt restructuring exercise.
Middle Eastern utility firm Utico is also still interested in striking an agreement, said its chief executive Richard Menezes via e-mail yesterday, noting "the criminal investigations should not stop the deal but only ensure quick relief to all affected parties and save the company and its employees".
Securities Investors Association (Singapore) president David Gerald said the probe highlights the need for Hyflux's board to be more transparent in its communication with investors and shareholders as the restructuring process continues.
From losses to failed rescue deal to criminal probe
Feb 23, 2017
Hyflux's Tuaspring power and desalination plant fails to turn a profit.
Feb 27, 2018
It reports a net loss of $118.4 million for FY2017.
May 22, 2018
Hyflux files for bankruptcy protection, gets automatic 30-day moratorium. All shares and securities trading is suspended.
Jan 18, 2019
Hyflux warns that retail investors will get nothing if the company is liquidated.
Hyflux's $530 million rescue deal with Indonesian consortium SM Investments falls through.
April 18, 2019
Financial regulators announce review of Hyflux's disclosure and accounting practices.
May 18, 2019
National water agency PUB takes over Tuaspring desalination plan.
Nov 26, 2019
Hyflux reaches agreement with Middle Eastern utility firm Utico over $400 million rescue deal.
May 29, 2020
Hyflux says rescue deal with Utico has "ceased".
June 2, 2020
The Singapore authorities announce investigation into Hyflux over corporate governance breaches.