Latest news with #Tuaspring
Straits Times
13 hours ago
- Business
- Straits Times
Hyflux investigator ‘took advantage' of Olivia Lum's inability to recall events: Davinder Singh
Sign up now: Get ST's newsletters delivered to your inbox SINGAPORE - Despite earlier concerns about Hyflux's Tuaspring project, a group of banks still gave 'in-principle management support' for a loan of up to $527 million, argued the lead lawyer for Hyflux founder Olivia Lum on the second day of her trial. To support his case, Senior Counsel Davinder Singh made reference to a letter issued by the banks to Hyflux on Jan 14, 2011, after they had finished reviewing Hyflux's plan to build a desalination plant and power plant, and sell excess electricity from the power plant to the grid. In the letter, they said they had 'in-principle management support for a credit facility of up to $283 million for the desalination plant and shared infrastructure, and a credit facility of up to $244 million for the power plant,' as long as Hyflux met certain criteria, such as being named 'preferred bidder' for the project. This letter was sent 10 days after they had raised concerns about risks arising from Hyflux's strategy of selling electricity to subsidise the sale of water to PUB. In his cross-examination of the Commercial Affairs Department's lead investigating officer, Ms Jacqueline Wei Maojun, Mr Singh asked why she did not show Lum the entire letter when she was questioned in 2020, or 'give her a complete picture of the banks' position. He said the letter showed that the banks were prepared to give support, despite their concerns. Ms Wei replied: 'They were willing to give support, but not approval yet.' Top stories Swipe. Select. Stay informed. Singapore NEL, Sengkang LRT resume service after hours-long power fault; Punggol LRT being restored Singapore Live: NEL services resume fully; Sengkang-Punggol LRT services still unavailable Singapore Plan to base Singapore's F-15 fighter jets in Guam cancelled Business Singapore raises 2025 economic growth forecast but warns of uncertainty from US tariffs Singapore Off-duty SCDF officer dies after accident in Punggol; 15-year-old pillion rider taken to hospital Singapore 14 political parties asked for proof of existence have yet to comply with foreign interference law: MHA Business Goh Cheng Liang, Nippon Paint billionaire and richest Singaporean, dies aged 98 Business StarHub buys rest of MyRepublic's broadband business in $105m deal; comes after Simba buys M1 'I suggest to you that you took advantage of Lum's inability to recall what happened many years ago,' Mr Singh said. Ms Wei said: 'There's no need for me to hide any information from her, because she will always clarify the answers she gave to statements... I have control over questions I want to ask.' Mr Singh said: 'You have control, but you also have a duty to be fair. Not showing her the in-principle commitment in the Jan 14 2011 letter was unfair.' Ms Wei replied that she was focused on finding out what happened to the desalination plant's funding, rather than the banks' concerns. Mr Singh said: 'I am putting it to you that the reasons you didn't show her the Jan 14 letter is you were trying to create a scenario for the conclusion of your investigations, that the banks were affected by concerns over merchant sale risk.' He was referring to the risks of selling electricity to the grid. Ms Wei disagreed. 'It would have been better for me to ask the banks directly,' she said. Six banks signed in-principle commitment letters in October 2010 indicating their willingness to finance the project. But they had not been told of Hyflux's plan to build a power plant and sell excess electricity to the grid at the time, the prosecution said on the first day of the trial. In November 2010, when they found out about Hyflux's power strategy, they 'raised serious concerns'. In January 2011, they told Hyflux that they could not lend it money on the terms previously indicated, as the power plant introduced new 'merchant sale risk and operational risk'. Later that month, they informed Hyflux of their 'in-principle management support'. On July 4, 2011, three of the original six banks – DBS, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation – extended financing of $150 million for the construction of the desalination plant. This financing was eventually terminated by Hyflux. Pointing to the announcement that Hyflux had secured financing of $150 million, Mr Singh asked Ms Wei if there was any reason to doubt that this was a bridging loan - an interim measure to give the banks time to assess their concerns and Hyflux's request for project financing. He said: 'When the prosecution says this financing of $150 million was eventually terminated by Hyflux, what really happened is that it wanted to repay the money ahead of time.' Mr Singh also referred to a December 3, 2013 news release from Hyflux that its subsidiary Tuaspring had secured a $720 million,18 year term loan facility to fund the development of the desalination and power plant facilities in September that year. The financing was provided by Maybank Singapore and Maybank Kim Eng Securities. 'You would agree with me that this is ... an endorsement by a leading bank of its faith in the project, correct?' Mr Singh asked. Ms Wei replied: 'It shows a willingness to lend.' Mr Singh noted that the prosecution is not calling on anyone from Maybank as a witness. asked: 'I suggest to you that the reason prosecution has not produced Maybank documents, and is not calling Maybank as witness, is because that would undermine the prosecution's case.' Ms Wei disagreed. The hearing continues.
South China Morning Post
a day ago
- Business
- South China Morning Post
Who is Singapore's Olivia Lum? From corporate darling to criminal suspect
Singapore 's Hyflux founder Olivia Lum has gone from being an entrepreneurial darling in the 2000s – bagging numerous business awards and ranking on high-powered lists that featured mostly men – to now facing criminal charges in court over her company's failure to disclose information to investors. On Monday, Lum, 64, arrived at the state courts to stand trial over failure to communicate to investors and the Singapore Exchange information on Tuaspring Integrated Water and Power Project, in the latest controversy surrounding what was once one of the hottest firms in the Asian water market. The prosecution argued that investors were led to believe that the project was primarily a desalination project and that the power plant was to be built to supply power to the desalination plant but, in reality, the viability of Tuaspring depended on the sale of electricity. This meant that it exposed Hyflux to electricity market risks in what was a brand-new business for the company, according to prosecutors. These facts were allegedly not disclosed to the investing public, and the omission was purportedly repeated when the offer information statement was released to raise funds from the public, they said. The main entrance of the state courts in Singapore. Singapore's Hyflux founder Olivia Lum is facing criminal charges in court over her company's failure to disclose information to investors. Photo: AP Lum, represented by senior counsel Davinder Singh, faces a jail term of up to seven years, a fine of up to S$250,000 (US$194,500), or both, if she is convicted of consenting to Hyflux's intentional failure to disclose the electricity sale information to the securities exchange.
CNA
a day ago
- Business
- CNA
Hyflux trial: Ex-CEO Olivia Lum's lawyer grills lead investigation officer
SINGAPORE: The lead defence counsel for Olivia Lum Ooi Lin, the former chief executive officer of now-defunct homegrown water treatment firm Hyflux, on Monday (Aug 11) grilled the investigation officer in charge of a probe into the company's top officers about the way she handled the investigation. Lum, 64, is on trial for two charges under the Securities and Futures Act for leaving out information about Hyflux's Tuaspring project pertaining to its sales of electricity in two key public statements in 2011. Hyflux successfully bid for the project in 2011, in response to a tender conducted by the Public Utilities Board, now known as PUB. The project had been pitched to the market as Hyflux's second and largest seawater desalination plant in Tuas, with the company raising S$400 million (US$310 million) from the issuance of preference shares. However, the company allegedly did not reveal at the time that it would fund the sale of water at a very low price to national water agency PUB, with a new business of selling electricity from a power plant it would build. Hyflux, Singapore's first publicly listed water treatment and seawater desalination company, later suffered massive losses after a fall in electricity prices and entered liquidation in July 2021. The collapse of the company left investors with significant losses, including about 34,000 investors holding perpetual securities and preference shares who were owed a total of S$900 million. DAVINDER SINGH PLACES IO UNDER CROSSHAIRS On Monday afternoon, Lum's lead lawyer Senior Counsel Davinder Singh questioned the prosecution's first witness about the manner in which she had taken statements from Lum. In response to his questioning, lead investigating officer Wei Maojun, Jacqueline from the Commerical Affairs Department (CAD) shared her background: She studied accountancy at Nanyang Technological University before joining PricewaterhouseCoopers as an audit associate. She then joined the CAD in 2014. "So you have never been in the industry? In the market, in listed companies?" asked Mr Singh. "Yes," said Ms Wei. She added: "I may not have had experience in the corporate world, but in my experience as an investigator ... we do (understand) the (SGX) listing rules. Besides that, we did seek views from regulators, experts and the prosecution before ... (framing) the charges," she said. She had agreed earlier to Mr Singh's suggestion that she had been the one who came up with what was defined as the omitted information in the charges faced by Lum. Initially, she said she approached a securities expert, Mr Kevin Gin, before the investigations into the case commenced. She agreed that she had provided Mr Gin with a document called "terms of reference", where she asked Mr Gin to assume certain facts concerning the allegedly omitted information in forming his expert opinion. Mr Singh questioned Ms Wei on when she provided the terms of reference to Mr Gin, but she said she could not remember. "You see it's interesting that you say that about events that took place just two to three years ago. You can't remember, right?" said Mr Singh. "You were the IO in charge of this investigation. And getting expert opinion was an important part of this investigation." The judge intervened and said it would not be fair to ask Ms Wei on the stand like that to test her memory, asking if she could look at some notes or her diary. Mr Singh then showed evidence to Ms Wei that the terms of reference had been given to Mr Gin in December 2023. "It would therefore appear, Ms Wei, that my client was charged in November 2022 about omitting the information, even before you obtained Mr Gin's expert report in relation to the implications of the omission of the information, correct?" asked the seasoned lawyer. Ms Wei agreed. "Therefore, I suggest to you that what happened was that, having come to the view of what the information was, which should have been included but was omitted, you then set about to get an expert to back you up on that, right?" asked Mr Singh. He also put it to Ms Wei that when Lum was charged, Ms Wei "did not even have Mr Gin's expert view on the implications of the omission of the information". Ms Wei disagreed and said the investigators had engaged Mr Gin and sought his view even before investigations commenced. However, she later agreed with Mr Singh when he said it was she who came up with the list of information that should have been disclosed and not Mr Gin. Mr Singh then repeatedly asked Ms Wei about specific questions she had asked Lum during her statement taking. He pointed out that Lum had stated many times that she simply could not recall because it had been nine or 10 years ago. At one point, Mr Singh parsed an answer by Lum in a police statement, saying that Lum was saying it happened 10 years ago and that she could not recall primarily because of the time gap. Ms Wei replied: "Possibly." "Not possibly, primarily," said Mr Singh. "You had trouble with two years ago." Ms Wei responded that it was not for her to speculate how Lum felt. CONFIDENTIALITY AGREEMENT At another point, Mr Singh pointed Ms Wei to one question she had asked Lum during the statement recording, where Ms Wei asked Lum why Hyflux had not disclosed the "extent of the significant revenue exposure". Lum had said "I cannot remember why we didn't do so". She then added: "I also want to let you know that we have to abide (by) a confidentiality agreement signed with PUB, so there were limitations on the extent of disclosure we can make as well." Mr Singh questioned Ms Wei on whether she was aware about this confidentiality agreement. "Did you yourself check and confirm there was this confidentiality agreement?" asked Mr Singh. "I don't recall whether we did check whether there is a confidentiality agreement," answered Ms Wei. "But it's an important point that she made, right? And yet you didn't check it?" asked Mr Singh. "We asked if PUB would have concerns if they wanted to disclose (certain things), so in a way we did check," said Ms Wei. "But that's not answering my question," countered Mr Singh, repeating his question again. Ms Wei later said the investigators did ask for a few agreements between PUB and Hyflux, and they understood that as part of the agreement, there was "some confidentiality involved", with regard to the proposal and the purchase of water agreement. Mr Singh had earlier told the court that he would take at least the whole afternoon to cross-examine Ms Wei. Once he is done, the lawyers for the other accused former leaders of Hyflux will take their turns cross-examining Ms Wei on Tuesday. The others on trial are Cho Wee Peng, 56, former Hyflux chief financial officer; as well as former independent directors of Hyflux Gay Chee Cheong, 68; Teo Kiang Kok, 69; Murugasu Christopher, 66; and Lee Joo Hai, 69. The trial is set to continue until Wednesday this week, before resuming next Monday. Trial dates have been set as far as January next year. If convicted of consenting to Hyflux's intentional failure to disclose the electricity sale information to the securities exchange, Lum can be jailed for up to seven years, fined up to S$250,000, or both.
Malay Mail
2 days ago
- Business
- Malay Mail
Singapore Hyflux trial opens as prosecutors detail Tuaspring risk omissions, S$900m investor losses
SINGAPORE, Aug 11 — Hyflux's troubled Tuaspring water-and-power project, which ended in a collapse wiping out nearly S$900 million (RM2.97 billion) of retail investor funds, was financed through an oversubscribed preference share issue after banks refused to back its electricity-linked business model, prosecutors told a Singapore court Monday at the start of a 56-day trial of the company's former executives. As reported by The Straits Times, Deputy Chief Prosecutor Christopher Ong said that in 2011, a consortium of banks raised 'serious concerns' after learning Hyflux planned to sell electricity from Tuaspring's power plant to offset losses from water sales to the Public Utilities Board (PUB). Hyflux had secured the tender for Singapore's largest desalination plant by bidding just S$0.45 per cubic metre — a price at which the 'plant would operate at a loss', Ong told the court. The company planned to make up the shortfall by selling most of its electricity to the national grid, despite having no prior experience in the power market. Only three banks later offered limited financing, which Hyflux declined. 'Lum was determined that Hyflux had to win the bid and cement its status as a global leader in the water treatment and desalination industry. Hyflux was facing setbacks in its Middle Eastern ventures, and winning the Tuaspring bid was critical for strengthening the company's order book,' Ong was quoted as saying, referring to founder and then-CEO Olivia Lum. With bank funding out of reach, Hyflux raised S$400 million in April 2011 through an oversubscribed preference share issue. Prosecutors allege the offer documents omitted key risks about Tuaspring's power market exposure — information Lum allegedly withheld to avoid spooking investors. Tuaspring's desalination plant began operating in 2013, but its power plant was delayed until 2015. By then, electricity prices had plunged, contributing to a US$115.6 million after tax loss in 2017. The strain culminated in Hyflux's 2018 collapse, leaving about 34,000 perpetual securities and preference shareholders facing combined losses of roughly S$900 million. Six former directors and executives, including Lum, deny charges of failing to disclose material information. The prosecution is proceeding on 11 charges, with testimony expected from former employees, bankers, PUB officials and market experts. The trial is set to run until February 2026.
The Star
2 days ago
- Business
- The Star
Hyflux issued preference shares to fund Tuaspring as it had problems getting bank loans: Prosecution
SINGAPORE: Hyflux issued preference shares to fund its Tuaspring project because it had trouble getting bank loans, the prosecution said on the first day of the trial involving former senior executives of the failed water treatment plant. Deputy Chief Prosecutor Christopher Ong noted that a consortium of banks had raised concerns in 2011 over Hyflux's strategy of selling electricity to subsidise the sale of water to PUB. This led Hyflux to consider other avenues of raising funds. Its eventual collapse left about 34,000 investors of perpetual securities and preference shares, who had sunk in a combined $900 million, with nothing. Former Hyflux employees and bank representatives who were involved in negotiations on financing the Tuaspring integrated water and power project are expected to testify for the prosecution. In total, seven people have been charged over Hyflux's intentional failure to disclose information relating to Tuaspring, among other things. Six of them – Hyflux founder and former chief executive Olivia Lum Ooi Lin, former chief financial officer Cho Wee Peng, and former independent directors Teo Kiang Kok, Christopher Murugasu, Gay Chee Cheong, and Lee Joo Hai – are contesting their charges in a 56-day trial scheduled to run from Aug 11 to Feb 5, 2026. The prosecution will proceed on 11 charges, including two of the six charges Lum faces. The remaining four charges against Lum are stood down. The prosecution, in an opening statement to the State Court on Aug 11, said Hyflux won the tender for Singapore's second and largest desalination plant with the lowest submitted bid. It had proposed to sell water to PUB at a first-year tariff price of $0.45/m3, undercutting its competitors by at least 27 per cent. 'At this price, the desalination plant would operate at a loss,' Ong said. 'To make the project financially viable, and also fulfil PUB's requirement to procure or produce electricity for the desalination plant at Hyflux's cost, Hyflux intended for the power plant to supply electricity to the desalination plant, while actually selling the vast majority of the power that it generated to the national grid.' It was only from this sale that Hyflux would be able to make up for the desalination plant's losses and make the project profitable. But Hyflux had no prior experience in power generation, much less selling electricity. The Tuaspring Project would be the first time Hyflux entered the electricity market, the prosecution said. How it all unfolded To finance the Tuaspring project, which was initially projected to cost $890 million, Hyflux sought a term loan of about $527 million from a consortium of banks. Six banks signed in-principle commitment letters in October 2010 indicating their willingness to finance the project. But they had not been told of Hyflux's plan to build a power plant and sell excess electricity to the grid at the time, Mr Ong noted. In November 2010, when they found out about Hyflux's power strategy, they 'raised serious concerns'. In January 2011, they told Hyflux that they could not lend it money on the terms previously indicated, as the power plant introduced new 'merchant sale risk and operational risk'. On July 4, only three of the original six banks - DBS, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation - extended Hyflux financing of $150 million for the construction of the desalination plant. This financing was eventually terminated by Hyflux. Tuaspring was ultimately financed by a shareholder's loan of $840.4 million by Hyflux in October 2011, which was in turn refinanced with Maybank Singapore and Maybank Kim Eng Securities in September 2013. In January 2011, in the midst of their negotiations with the banks, Hyflux's management began to contemplate issuing of preference shares to raise funds. On Jan 19 2011, Hyflux senior vice president, legal (business) Yang Ai Chian informed the Board of the need to issue preference shares to 'increase our funding options' for 'several new major projects' that Hyflux was expected to win that year. In reality, this money was meant to fund Tuaspring because of the challenges Hyflux faced in getting bank financing. On April 13, Hyflux lodged an offer information statement with the Monetary Authority of Singapore to issue up to $200 million in 6% preference shares. These were oversubscribed and the offer amount was increased. Hyflux ultimately raised $400 million. But the statement did not mention risks arising from Hyflux's entry into the electricity business, or those associated with Hyflux's strategy for Tuaspring, which could affect the company's financial position or results, the prosecution said. The information was omitted because Lum wanted to downplay Tuaspring's significant exposure to the electricity market, both in Hyflux's announcement that it had been named the 'preferred bidder' for the desalination project, as well as in the offer information statement, the prosecution said. 'Lum was determined that Hyflux had to win the bid and cement its status as a global leader in the water treatment and desalination industry. Hyflux was facing setbacks in its Middle Eastern ventures and winning the Tuaspring bid was critical for strengthening the company's order book,' Ong said. 'She did not want to detract from the positive news of winning a landmark water project, by revealing the Tuaspring Project's reliance on electricity sales, and the fact that the low tariff price – the key to winning the tender – was only viable because of such electricity sales.' The prosecution also said Lum was well aware of the banks' negative reactions regarding the power plant component of the project, and feared that full disclosure might deter investors and compromise Hyflux's ability to raise funds through the planned preference shares. This, in turn, could jeopardise financial close for the project and potentially result in losing the bid, the prosecution said. The desalination plant of the Tuaspring Project became operational on Sept 18, 2013. But its power plant only became operational nearly two years later, on or around August 2015. It began selling electricity commercially on Feb 18, 2016. In March 2011, the average Uniform Singapore Energy Price had been around $187 per megawatt hour (MWh). By February 2016, this had fallen to around $49.10 per MWh. As the profitability of Tuaspring depended on electricity sales, this fall in electricity prices hit Hyflux hard. In its 2017 annual report, it reported a $115.6 million after tax loss. The report stated that the weak power market in Singapore drove losses for the first time in Hyflux's history, with the Tuaspring Project accounting for the majority of the losses. On May 21, 2018, Hyflux suspended trading of its shares. The next day, Hyflux announced that it had applied to seek court protection for debt reorganisation. On May 18, 2019, PUB took over the Tuaspring desalination plant. On June 1, 2022, a wholly owned subsidiary of Malaysia-based YTL Power International, YTL Powerseraya, completed its acquisition of the Tuaspring power plant. By Nov 16, 2020, Hyflux entered judicial management and into liquidation on Jul;u21 July 2021. Other witnesses include a lawyer from Stamford Law Corporation, who was Hyflux's external legal counsel on the April 2011 offer information statement; an SGX representative who will provide evidence on the sequence of events that led to this case being investigated; and a PUB representative, who will testify to PUB's dealings with Hyflux and its employees and management during the tender and award process for Tuaspring. The Prosecution will also adduce evidence from a securities expert, Kevin Gin who will address why the omitted information ought to have been disclosed by Hyflux. The hearing continues. - The Straits Times/ANN
