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Singaporeans petition President Halimah to appoint a commission of inquiry to look into Hyflux

The online petition comes as shareholders and investors are asking why Hyflux’s audit firm gave the organisation a clean bill of health in its annual reports over the last decade, instead of flagging the risk that Hyflux would become embroiled in heavy debt

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Over 800 individuals have petitioned President Halimah Yacob to appoint a commission of inquiry to look into Hyflux.

About 34,000 perpetual securities and preference shareholders who invested in the water and are owed a total of S$900 million, but only stand to receive a recovery rate of 10.7 per cent comprising of 3 per cent in cash and 7 per cent in equity.

Calling these retail investors “risk averse and non sophisticated investors,” the online petition noted that these investors chose to invest their hard-earned funds into Hyflux as they considered the company’s water desalination plant a strategic national asset.

The online petition comes as shareholders and investors are asking why Hyflux’s audit firm gave the organisation a clean bill of in its annual reports over the last decade, instead of flagging the risk that Hyflux would become embroiled in heavy debt.

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KPMG has audited Hyflux since 2008. Hyflux slipped into the red for the first time in 2017 since it was listed in 2001. Two months later, it filed for bankruptcy.

The move shocked investors who had believed the company was healthy. Indeed, Hyflux’s financial statements before this point did not give cause for concern since it was prepared on the basis of an accounting method that assumes the company will remain solvent and operational indefinitely until proven otherwise.

Asking the President to intervene, the petitioners asked her to “appoint a commission of inquiry to take an independent review of this matter.” The petitioners requested that the review should look into whether adequate steps were taken to protect the interests of investors.

View the petition, which is nearing 1,000 signatures, HERE. One of the individuals who signed the petition is former presidential candidate and ex-NTUC Income CEO Tan Kin Lian, who funded the recent protest at Hong Lim Park against Hyflux’s restructuring plans.

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The petition was organised as Singapore’s regulators have initiated a review into Hyflux to discover whether the debt-laden firm has breached regulations.

In a joint statement to Channel NewsAsia, the Monetary Authority of Singapore (MAS), the Accounting and Corporate Regulatory Authority (ACRA) and the Singapore Exchange Regulation (SGX) said they are “currently reviewing Hyflux-related disclosure issues”.

MAS, ACRA and SGX are also looking at compliance with accounting and auditing standards, to determine if there have been breaches of listing rules and/or the relevant laws and regulations”.

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Hyflux, which is nearing the end of a -sanctioned debt moratorium on 30 Apr, told the publication that it is “cooperating fully” with the regulators.

Analysts have said that the odds of for Hyflux have risen, especially after the Salim-Medco rescue deal fell through with no assurances of another such deal. The Indonesian consortium was touted to be a “white knight” and the only hope for the retail investors of Hyflux who have been left high and dry.

On Monday, Hyflux filed a writ of summons in the Singapore against the Indonesian consortium “to commence an action against the investor for repudiation of the restructuring agreement” as well as to claim a deposit of S$38.9 million.

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