SINGAPORE — The trial of Olivia Lum, former CEO of Hyflux, alongside five others, commenced on 11 August 2024, amidst significant fallout from the collapse of the water treatment firm. Known for pioneering the water and power sector in Singapore, Hyflux fell from grace, culminating in its liquidation in July 2021.
Background of the Case
Hyflux’s downfall has raised eyebrows and concerns across the investment landscape, with the prosecution alleging that the company failed to adequately disclose crucial information regarding the Tuaspring integrated water and power project. This omission reportedly led to losses amounting to S$900 million, impacting approximately 34,000 investors holding perpetual securities and preference shares.
The Key Players
- Olivia Lum Ooi Lin (64) – Former CEO and Executive Chairman
- Cho Wee Peng (56) – Former Chief Financial Officer
- Gay Chee Cheong (68) – Independent Director
- Teo Kiang Kok (69) – Independent Director
- Murugasu Christopher (66) – Independent Director
- Lee Joo Hai (69) – Independent Director
A seventh individual, Rajsekar Kuppuswami Mitta, also a former independent director, was fined S$90,000 for pleading guilty to related charges last week.
The Tuaspring Project
Launched in 2011, the Tuaspring Project was heralded as a significant advancement for Singapore’s water treatment capacity. However, the prosecution contends that the project was financially hamstrung by the requirement to sell electricity, a new venture for Hyflux that was not adequately communicated to investors.
Current Trial Proceedings
The trial is set to unfold over approximately 57 days, spanning two tranches between August and January, presided over by Principal District Judge Toh Han Li. Each testimony and piece of evidence will be crucial in determining the accountability of the former leaders in the company’s dramatic decline.
Lawyers from Davinder Singh Chambers are defending Lum, while Rajah & Tann represent Cho. The remaining directors are defended by Shook Lin & Bok.
This case not only raises questions about corporate governance but also serves as a cautionary tale on the obligations of public companies towards their investors.