Hyflux trial: Defence accuses ex-corporate communications head of just forwarding emails, changing answers
The email chain in question, sent in December 2010, is important because it contained drafts of a news release by Hyflux announcing that the company had been awarded a contract by PUB for the Tuaspring desalination plant.
Earlier drafts contained mentions of a new electricity business the project was to engage in, but it was later edited out.
Who directed the edit is one of the issues under scrutiny, with the former corporate communications head Ms Winnifred Heap Ah Lan stating that it was following input from then-chief executive officer Olivia Lum Ooi Lin and then-chief financial officer Cho Wee Peng.
Lum, 64, and Cho, 56, are on trial along with four former independent directors of Hyflux for omitting details about the electricity sales in the Tuaspring project.
The project was pitched to the public as Hyflux's second and largest seawater desalination plant in Tuas. However, the prosecution's case is that Hyflux hid the fact that it would fund the sale of water at a very low price with the business of selling electricity from a power plant it would build.
The project suffered heavy losses on the back of weak electricity sales and ultimately resulted in Hyflux's liquidation, with 34,000 investors owed S$900 million (US$700 million).
Ms Heap was the prosecution's second witness. Lum's lawyer, Senior Counsel Davinder Singh, took the full day on Wednesday cross-examining Ms Heap on various presentations she had given in her capacity as head of corporate communications and investor relations.
The cross-examination was halting as Ms Heap often took some time to think, or did not answer Mr Singh's questions directly. At a few points, the judge had to intervene to keep proceedings going.
At one point, Ms Heap said: "I'm not sure why we are going round and round."
Mr Singh accused her of changing her answers, but she objected to this characterisation and said she was being consistent instead.
At another point, she said she was "just wondering" why Mr Singh kept repeating that she could not remember some events because it had been 15 years since the meetings or sessions she was being questioned about.
Mr Singh replied: "That's not your role. Your role is to answer my question."
For a large part of the day, Mr Singh took Ms Heap through various presentation decks she had led and questioned her on what she remembered but much of the time she said she could not remember.
COMPARING TWO NEWS RELEASES
Towards the end of the day, Mr Singh showed Ms Heap two news releases Hyflux had prepared under her charge - one was a draft news release in December 2010 for the Tuaspring project, another was in January 2011, about Hyflux being awarded three water projects in Chongqing, China.
He compared the two news releases and ran Ms Heap through the differences, if any.
In disagreeing with a question by Mr Singh, Ms Heap said any announcement would have to include the relevant details, such as size of the plant, revenue drivers, operating cost and location.
However, Mr Singh then showed her the Chongqing announcement and said it did not include anything about revenue drivers, which she had just said would have to be included in any announcement.
Ms Heap initially had a lengthy back-and-forth with Mr Singh before eventually agreeing that the parts she had said needed to be in announcements were not in the Hyflux draft announcement about the Tuaspring project.
"So the evidence you've given about such information needing to be in the announcement is something you just thought of," said Mr Singh.
"No," answered Ms Heap. "I was going to say, in a template, you will need ... what's the value of a contract, the location of a contract, the duration of a contract."
She had told the court earlier that the draft news release would have been prepared by Ms Seah Mei Kiang, who was part of her corporate communications team.
Ms Seah would have obtained input from the relevant personnel in Hyflux to draft the release, Ms Heap said.
Mr Singh questioned her on whether she could remember what was in Ms Seah's first draft, which Ms Heap asked to be amended.
Ms Heap said she could not remember.
"So I'm asking you now, 15 years ago, do you remember the content of the discussion you had with Mei Kiang on her draft? I'm not asking you to guess, or (say) what typically happens, I'm asking you if you remember what you said and what she said and what was discussed," said Mr Singh.
"No, I cannot remember," said Ms Heap.
In response to an email containing the draft of the news release on the Tuaspring project, finance personnel Nah Tien Liang replied with some comments asking to place the capacity of the power plant at 411MW instead of 350MW.
He also corrected an impression in the news release to say that both the power plant and desalination plant would be owned by the same special purpose company (SPC).
THE EMAIL FROM CAMILLE HURN
Mr Singh then focused on another reply to the email thread on Dec 20, 2010, this time by Ms Camille Hurn, who was senior vice president on energy and infrastructure development and who was the energy expert.
In the email, Ms Hurn wrote: "Dear all. Please see my comments marked up in the document. I agree with Tien Liang that the (SPC) for the generation and the desalination is the same and am not sure if we need to go into detail about our energy retailing arm, so have completely deleted that sentence. With regard to the power plant capacity, I think either 411MW or 350MW is okay, as 350MW is our estimate of actual output with local conditions."
Mr Singh asked Ms Heap what she did after receiving Ms Hurn's email. Ms Heap said she could not remember.
She said she could have walked over to Ms Hurn to discuss it with her as their offices were close to each other, but said she could not remember.
"Looking at Camille's email, she was raising a question right, about whether it's necessary to include that detail. Correct?" asked Mr Singh. "Did you consider it your job to engage her on that question? Or did you consider it your job to take the draft as it had come back with amendments and now pass it on?"
Ms Heap kept quiet for some time before saying, "I'm hesitating because I'm trying to recall. But typically, I would engage her to ask why."
She eventually said she could not remember what she did.
"So what appears to have been done was - you used an amended draft and had it sent on. I'm not criticising you, I'm just looking at the process. Correct?" asked Mr Singh.
Ms Heap did not answer directly, instead saying she was "not privy to the electricity power generation part of the discussion".
She said she could not recall if she discussed Ms Hurn's comment with anyone.
She then locked horns with Mr Singh over a question he posed her: "The last thing you would've wanted to do in an announcement is to give the message to the public that what Hyflux was now going to do was get into the utilities business with earnings over a long period of time. Correct?"
After the back-and-forth, Principal District Judge Toh Han Li intervened and said his understanding of Ms Heap's evidence was that it never crossed her mind that this whole project involved utilities, so it never crossed her mind that she had to talk about utilities.
Mr Singh later accused her of changing her answer, but Ms Heap said she had not. She repeatedly said that it was an integrated project in "all our minds", with Mr Singh correcting her to say he was concerned only with her mind.
She later said she wanted to change her evidence, and stated: "I'm saying that when we were preparing this announcement, like I mentioned several times, it didn't cross our minds that we should try to position this as a utility. For us, it's an integrated project that presents growth."
Mr Singh then asked Ms Heap again about the email from Ms Hurn.
"Here was a senior management person raising a concern which possibly could have been related to utilities and the IR (Investor Relations) strategy, but you did nothing as far as you can remember," he said.
"As far as I can remember, yes," said Ms Heap.
"And I also believe you didn't communicate the fact that Camille had concerns to anyone else. Correct?" asked Mr Singh.
Ms Heap said she "would have", but Mr Singh said he did not ask if she would have but whether she did or did not.
She replied that she could not remember.
Mr Singh said: "And Ms Heap, based on all your answers, it would appear that at this stage at least, Mei Kiang did the work in the first draft, she gave (it) to you, utilities didn't cross your mind, so it didn't occur to you that that might be what was said, or anything that was said was inconsistent with the IR strategy, you asked her to circulate the draft after discussion, when mark-ups came in with comments, you ignored the comments and just forwarded the mark-ups. Does that sound about right? Yes or no?"
Ms Heap said she could not remember.
Mr Singh then said: "I suggest to you - when you say you cannot remember discussing with Mei Kiang, what was discussed with Mei Kiang, you cannot remember if you discussed with Camille and based on what you did on the emails, it would appear that you (gave your role away) without drawing attention to issues that might arise on account of your IR strategy."
Ms Heap disagreed and said she could not remember, but she would have "done all that".
Mr Singh then showed her how she had replied an email in three minutes.
"There was no discussion. Correct? Look at the timing," he said.
Ms Heap agreed.
Mr Singh then repeatedly questioned Ms Heap on whether she failed to discuss the issue with Ms Hurn.
"You can't have so many different answers," said Mr Singh at the end of a line of questioning on this.
"Three versions. You said - no discussion, then you said I probably did not discuss, and (then) you say, I do not remember. Looking at the time of the emails, there was no discussion," said Mr Singh.
"Looking at the time of the email, there was no discussion, yes," Ms Heap said.
The judge then asked Mr Singh if he could wrap up. When asked how much longer he would take to cross-examine Ms Heap, Mr Singh said: "To be honest, I'm not sure, given the way evidence has come out. I can't say I will finish tomorrow."
Wednesday's cross-examination ended before Mr Singh could get to the drafts of the news releases, where the crucial portions about the electricity business were edited out.
This tranche of the trial ends on Thursday, with further dates in September.
If convicted of consenting to Hyflux's intentional failure to disclose the electricity sale information to the securities exchange, Lum could be jailed for up to seven years, fined up to S$250,000 or both.
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