WongPartnership wants out as Hyflux lawyer; debt reprieve extended
Sign up now: Get ST's newsletters delivered to your inbox
A one-week adjournment has been given for matters to either be resolved between WongPartnership and Hyflux or for new lawyers to be brought in to represent the firm.
PHOTO: ST FILE
Follow topic:
The High Court yesterday granted another extension of Hyflux's debt moratorium to Feb 28, following a surprise application by its lawyers from WongPartnership to discharge themselves from representing the water treatment firm.
Justice Aedit Abdullah said that WongPartnership lawyer Manoj Sandrasegara and his team are applying to discharge themselves as Hyflux's lawyers over issues pertaining to "withdrawal for loss of confidence and other good cause".
"These arise out of a conflict in position between WongPartnership and the applicants concerning assurances given in respect of adviser fees for the Securities Investors Association Singapore (Sias)," Justice Aedit said.
WongPartnership's position is that the disagreement was on the fees that were supposed to be safeguarded for Sias' advisers.
Justice Aedit added: "In the circumstances, we cannot proceed, but to be fair to (Hyflux), I need to give a short extension to cover the period in which they either resolve the matters with WongPartnership or bring on board new counsel."
Hyflux, in a Singapore Exchange (SGX) announcement last night, said that "it has lost confidence and trust in WongPartnership".
A pre-trial conference will be held in a week to determine if the difficulties have been removed, or new lawyers are to be brought on board. Another hearing is scheduled on Feb 20, and its outcome will determine if the debt moratorium should be further extended.
"This present situation does highlight the need for the responsible agencies to consider what structures are needed to help advise retail investors when things go belly up. I note that there is a working group led by SGX, and I hope measures will be taken," Justice Aedit said.
Hyflux reached a $400 million rescue deal with United Arab Emirates utility company Utico in November last year. Its creditor groups need to sign off on the plan.
Sias president David Gerald believes the latest development "should not delay the current restructuring process and investors need not worry". "As far as Sias is concerned, all its advisers have been fairly and adequately paid to date, and there is assurance in place for future payments for work to be done."
Mr Gerald said that in response to Sias' call a year ago - following the oil and gas debacle and then Hyflux - SGX convened a committee to look into the feasibility of getting insurers to provide financial assistance to retail investors who need legal and financial advice when bonds fail.
"This has to be in place because Singapore is positioning itself to be a leading retail bond market, and there are no provisions for legal and financial advice for investors when bonds fail," he noted.
An SGX spokesman said yesterday that its regulatory arm SGX RegCo has set up a working group to consider ways to improve the framework for retail bonds as well as related issues. It will consider matters such as the role of the issuer.
"We expect the working group's suggestions to be ready later this year and for a public consultation of proposed changes to the retail bond rules (to be carried out) by the year end," SGX said.
