Former CEO of Hyflux Ltd Charged with Additional Offences under the Companies Act and another Independent Director of Hyflux Ltd Charged with an Offence under the Securities and Futures Act

Singapore, 5 May 2023 - Following further investigations by the Commercial Affairs Department (CAD) of the Singapore Police Force, the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA), the former Chief Executive Officer of Hyflux Ltd (Hyflux), Ms Lum Ooi Lin, was charged in court today with additional offences under the Companies Act (Cap 50, 2006 Rev. Ed.)(CA), in relation to her failure to exercise reasonable diligence in the discharge of her duties as a director. 

2. Details of the additional charges faced by Ms Lum are as follows:

(a) One count of section 157(1) read with section 157(3) CA, for failing to exercise reasonable diligence in the discharge of her duties as a director, with respect to the approval of the release of Hyflux’s unaudited financial statements for the third quarter and nine months ended 30 September 2017. This relates to Hyflux’s omission to disclose in the said financial statements US$33,500,000 (approximately S$45,620,000 at the prevailing exchange rate on 9 November 2017) worth of bank deposits, that Hyflux had undertaken not to withdraw, as restricted bank balances;

(b) One count of section 157(1) read with section 157(3) CA, for failing to exercise reasonable diligence in the discharge of her duties as a director, with respect to the approval of the release of Hyflux’s unaudited financial statements for the financial year ended 31 December 2017. This relates to Hyflux’s omission to disclose in the said financial statements US$33,500,000 (approximately S$44,129,550 at the prevailing exchange rate on 27 February 2018) worth of bank deposits, that Hyflux had undertaken not to withdraw, as restricted bank balances; and

(c) One count of section 157(1) read with section 157(3) CA, for failing to exercise reasonable diligence in the discharge of her duties as a director, with respect to the approval of the release of Hyflux’s unaudited first quarter financial statements for the period ended 31 March 2018. This relates to Hyflux’s omission to disclose in the said financial statements US$47,500,000 (approximately S$63,749,750 at the prevailing exchange rate on 9 May 2018) worth of bank deposits, that Hyflux had undertaken not to withdraw, as restricted bank balances.

3. Ms Lum also faces two earlier charges (one count of section 203(2) read with section 331(1) of the Securities and Futures Act (Cap 289, 2006 Rev. Ed.)(SFA) and one count of section 253(1)(b) read with sections 253(4)(b)(i) and 277(3) SFA) for disclosure-related offences and one charge under section 201(5) read with section 204(1) CA for failure to ensure Hyflux’s compliance with accounting standards¹.

4. In addition, one other independent director of Hyflux, Mr Lee Joo Hai, has been charged with one count of section 203(2) read with section 331(1) SFA on 13 March 2023. The charge relates to his negligence in connection with Hyflux’s intentional failure to disclose information relating to the Tuaspring Integrated Water and Power Project when such disclosure was required under the Singapore Exchange Listing Rules. Mr Lee left Singapore before investigations commenced and was arrested in Malaysia on 12 March 2023, with assistance from the Royal Malaysia Police. 

5. If convicted, the accused persons face:

(a) imprisonment of up to seven years, a fine not exceeding $250,000, or both, on each section 203 SFA charge;

(b) imprisonment of up to two years, a fine not exceeding $150,000, or both, on each section 253 SFA charge;

(c) imprisonment of up to 12 months or a fine not exceeding $5,000, on each section 157 CA charge; and

(d) a fine not exceeding $50,000, on the section 201 CA charge.

6. The Public Accountants Oversight Committee (PAOC), which administers ACRA’s Practice Monitoring Programme under the Accountants Act, has issued orders against the auditors of Hyflux from KPMG LLP in relation to the relevant financial statements for the financial years ended between 2013 and 2017. We are unable to share any further information due to ongoing civil proceedings related to this matter.

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¹Details on the earlier charges brought against former CEO, CFO and Independent Directors of Hyflux on 17 November 2022, can be found at: https://www.acra.gov.sg/news-events/news-details/id/686

SINGAPORE POLICE FORCE

MONETARY AUTHORITY OF SINGAPORE

ACCOUNTING AND CORPORATE REGULATORY AUTHORITY

5 MAY 2023

Additional Information

Companies Act (Cap 50, 2006 Rev. Ed.)(CA)

Section 157(1) CA

Section 157(1) CA prescribes that that a director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his or her office.

Securities and Futures Act (Cap 289, 2006 Rev. Ed.)(SFA)

Section 203(2) SFA

Section 203(2) SFA provides that an entity, the securities of which are listed for quotation on a securities exchange, shall not intentionally, recklessly or negligently fail to notify the securities exchange of such information as is required to be disclosed by the securities exchange under the listing rules or any other requirement of the securities exchange, if the person is required by the securities exchange under the listing rules or any other requirement of the securities exchange to notify the securities exchange of information on specified events or matters as they occur or arise for the purpose of the securities exchange making that information available to a securities market operated by the securities exchange. Rule 703(1)(a) of the SGX Listing Rules provides that an issuer must announce any information known to the issuer concerning it or any of its subsidiaries or associated companies which is necessary to avoid the establishment of a false market in the issuer’s securities.

Section 331(1) SFA

Section 331(1) SFA provides that where an offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of an officer of the body corporate, the officer as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.