The authorities have launched a probe into Hyflux Ltd and its current and former directors for "suspected false and misleading statements and breaches of disclosure requirements".

The probe will determine whether there were lapses in Hyflux’s disclosures concerning the Tuaspring Integrated Water and Power Project (Tuaspring IWPP), as well as non-compliance with accounting standards between 2011 and 2018.

The joint investigation will be handled by:

• The Singapore Police Force (SPF)
• The Monetary Authority of Singapore (MAS)
• The Accounting and Corporate Regulatory Authority (ACRA)
• The Commercial Affairs Department (CAD)

It will investigate Hyflux and people who were on its board of directors between 2011 and 2018.

Probe also concerns subsidiary Tuaspring

As part of the investigation, CAD, MAS and ACRA have obtained accounting and other corporate records from Hyflux and its subsidiary, Tuaspring Pte Ltd.

The authorities have also interviewed Hyflux’s directors and key officers who were involved in the Tuaspring IWPP.

It added that the investigation is not intended to interfere with Hyflux's current business reorganisation process, stating: "The criminal investigations are separate from and do not pertain to the ongoing corporate rescue process."

Why so long?

The authorities acknowledged that the review took over a year to complete.

They explained that the review was an "extensive exercise" covering Hyflux's financial statements over a period of eight years from 2011 to 2018, and the current investigation was launched as soon as the review was done.

However, they declined to give an estimation to when the investigation would be completed.

Probe follows review

According to a joint statement on June 2, the probe follows a review into Hyflux's activities that was announced on April 16, 2019.

The review disclosed reasons to suspect that offences may have been committed.

The alleged offences were committed against Sections 199 (False or misleading statements, etc.), 203 (Continuous disclosure) and 253 (Criminal liability for false or misleading statements) of the Securities and Futures Act (Cap. 289).

The possible penalties under Sections 199 and 203 include a fine of up to S$250,000, a jail term of up to seven years, or both.

The statement also alleged non-compliance with accounting standards under Section 201 (Financial statements and consolidated financial statements) of the Companies Act (Cap. 50), which also includes penalties in fines and jail terms.

I'm a Hyflux investor, what happens to me?

The authorities advise investors who wish to recover losses suffered from Hyflux investments to seek independent legal advice, as a criminal investigation is different from a civil claim.

Investors are not required to lodge a police report. But if they have any relevant information about Hyflux, they may submit it at the following online link: https://www.police.gov.sg/iwitness

Or they can write a letter to the following address:

391 New Bridge Road

Police Cantonment Complex

Block D, #06-701

Singapore 088762.

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Top image by Matthias Ang.