Hyflux.
To the unacquainted, it sounds like a new Pokemon, but to everyone else, the name is synonymous with misconduct.
It all started in 2018 with its high-profile debt restructuring attempt due to a massive drop in earnings.
Hundreds of shocked Hyflux investors gathered at Hong Lim Park the next year to draw attention to the company’s losses and to urge fellow investors to vote against their restructuring proposal.
Investors were also upset with PUB’s takeover of Hyflux’s Tuaspring desalination plant at zero dollars.
Then, in April 2019, the authorities said they were reviewing disclosure issues and accounting practices to determine if the company had breached any regulations.
Now, Hyflux has hit the headlines yet again, and just like the last two years, it’s not exactly good news.
Directors Allegedly Gave False Statements & Misleading Statements
Hyflux and its current and former directors are being investigated for suspected false statements, disclosure requirement breaches, and non-compliance with accounting standards.
In other words, they’re being accused of being a bunch of liars.
Based on their year-long review which started in April 2019, the authorities said that there is “reason to suspect that offences had been committed”.
The current investigation will be jointly carried out by the police’s Commercial Affairs Department (CAD), the Monetary Authority of Singapore (MAS), and the Accounting and Corporate Regulatory Authority (ACRA).
According to CNA, this investigation will “ascertain whether there were lapses in Hyflux’s disclosures concerning the Tuaspring Integrated Water and Power Project (Tuaspring IWPP)”.
In addition, it will determine whether there was non-compliance with accounting standards between 2011 and 2018, said the authorities.
Hyflux’s directors and key officers involved in the Tuaspring IWPP have also been interviewed by the authorities, reported CNA.
In response to the investigation, the company said that it is “assisting and will cooperate fully with CAD in its investigations”, and that it will make further announcements if there are any updates.
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Debt, Debt, and More Debt
It’s unclear exactly what’s going on over at Hyflux, but one thing’s for certain; they are drowning in debt.
In fact, when the company started its debt-restructuring exercise in 2018, it also sought a moratorium on creditors from the High Court to prevent getting wound up.
In non-businessy terms, this means that the company was granted a delay in the payment of debts or obligations to prevent its assets from being seized to pay off its debts.
This moratorium will expire at the end of July, and they have a debt of nearly $3 billion.
Moreover, according to CNA, Middle-Eastern company Utico was supposed to swoop in to rescue Hyflux with a S$400 million deal, but this has “ceased”.
Now, Hyflux is pinning its hopes on other investors like Aqua Munda, who offered to purchase about S$1.8 billion worth of Hyflux’s debt last year.
With criminal investigations, mounting debt, and Covid-19 battering the economy, things do not look good for the water treatment firm.
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