Former CEO, CFO, IDs of Hyflux charged with offences under SFA

If convicted, they can face imprisonment of up to seven years.

Authorities have charged Hyflux Ltd's (Hyflux) former CEO, Lum Ooi Lin, former CFO, Cho Wee Peng, and four independent directors with disclosure-related offences under the Securities and Futures Act (SFA).

Lum was also charged with an offence under the Companies Act (CA) for her failure in ensuring Hyflux’s compliance with accounting standards.

The charges per individual are as follows:

Lum Ooi Lin:

• One count of section 203(2) read with section 331(1) SFA, for consenting to Hyflux’s intentional failure to disclose information relating to the Tuaspring Integrated Water and Power Project (Tuaspring), when such disclosure was required under the Singapore Exchange Listing Rules (Listing Rules);
• One count of section 253(1)(b) read with sections 253(4)(b)(i) and 277(3) SFA for Hyflux’s omission to state the same information relating to Tuaspring in the 2011 Offer Information Statement (2011 OIS). The 2011 OIS was issued for the offer of S$200 million, 6% preference shares on 13 April 2011; and
• One count of section 201(5) read with section 204(1) CA for failing to ensure that Hyflux made disclosures required under the accounting standards for its financial statements for the financial year ended 31 December 2017. This included the failure to disclose the breach of a subsidiary’s loan agreement that permitted its lenders to demand accelerated repayment.

Against Cho Wee Peng:

• One count of section 203(2) read with section 331(1) SFA for conniving in Hyflux’s intentional failure to disclose information relating to Tuaspring, when such disclosure was required under the Listing Rules.

Against four Independent Directors of Hyflux, namely Teo Kiang Kok, Gay Chee Chong, Murugasu Christopher and Rajskar Kuppuswami Mitta:

• One count each of section 203(2) read with section 331(1) SFA, for their neglect in connection with Hyflux’s intentional failure to disclose information relating to Tuaspring, when such disclosure was required under the Listing Rules; and
• One count each of section 253(1)(b) read with sections 253(4)(b)(i) and 277(3) SFA, for Hyflux’s omission to state the same information in the 2011 OIS.

If convicted, the accused persons may face: imprisonment of up to seven years, a fine not exceeding $250,000, or both, on each section 203 SFA charge; imprisonment of up to two years, a fine of not exceeding $150,000, or both, on each section 253 SFA charge; and a fine not exceeding $50,000, on the CA charge.