Singapore charges Hyflux founder with disclosure offences

(Nov 17): Singapore charged the founder of Hyflux Ltd and several people linked to the collapsed firm with offences related to the disclosure of information, a step toward resolving one of the nation’s most high-profile corporate scandals.

Olivia Lum, who was the firm’s chief executive officer, was charged on Thursday (Nov 17) for failing to disclose information related to a water treatment and power project to the exchange as well as during the sale of preference shares to the public in 2011, according to a statement by the police, the Monetary Authority of Singapore and the Accounting and Corporate Regulatory Authority, or Acra.

Lum, now 61, was also charged for breaching accounting rules in the company’s 2017 financial statements. Lum, who appeared in court in a black shirt and short hair, was once one of the most-lauded female entrepreneurs in the country and her rags-to-riches story was well-known.

Former chief financial officer Cho Wee Peng, now 53, and four independent directors of the company at the time were also charged. If convicted, the accused face imprisonment as well as fines.

Local authorities started investigating Hyflux and its directors in 2020. Last year, a Singapore court ordered the liquidation of Hyflux, capping a drawn-out saga that left many investors and creditors with losses. Tens of thousands of retail investors bought Hyflux’s 6% perpetual preference shares that were sold in 2011.

In their statement, authorities said they investigated DBS Bank Ltd, Singapore’s biggest lender, for its role as issue manager in the 2011 offer of S$200 million (US$146 million) preference shares. They said “no further action will be taken after reviewing the evidence obtained”.

The outcome of Acra’s inspection of the audits conducted by KPMG LLP, who was Hyflux’s auditors, will be finalised in due course, according to the statement.

Following a spate of high-profile corporate scandals in recent years, Singapore has tightened oversight and pushed for more disclosure to burnish its appeal as a global wealth hub. The city-state is a popular destination for some of the world’s wealthiest individuals, due in part to its stability and rule of law.