[SINGAPORE] The former head of corporate communications at Hyflux agreed with the lawyer of Olivia Lum – who founded the water treatment company and was the chief executive officer – that she was not told to hide any information from the investing public in engagement events.
Winnifred Heap provided this evidence when she was cross-examined by Senior Counsel Davinder Singh in Day 5 of the trial of Lum, the former chief financial officer (CFO) Cho Wee Peng and four independent directors.
She was referred to Hyflux’s investor relations plans for 2011 where it was mentioned that she had arranged a series of international roadshows for Lum to meet up with existing and potential shareholders in Japan, London and Paris.
She also said she had attended conferences organised by various securities houses to meet fund managers.
While she could not recall if the roadshows did take place because of the passage of time, she agreed with Lum’s lawyer that she was not given any instructions to hide any facts in the list of questions and answers she would have prepared for the roadshows or the information she furnished at conferences.
“In fact you wouldn’t agree even if you were told to do so?” asked Singh.
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“Yes,” she responded.
She agreed with him that it was the standard and the norm in Hyflux that it must be upfront and maintain integrity in the information she provided in her presentation and the prepared questions and answers to the investing public.
The witness also agreed with the lawyer that the exercise of the risk management committee to continue positioning Hyflux as a growth company was conducted in good faith in the interests of both shareholders and stakeholders.
It was through announcing new orders that Hyflux would be able to keep its positioning of a growth company, she added.
There was a tense moment when she asked why Singh had kept attributing her failure to recollect to “it happened 15 years ago”.
To which, Singh retorted: “That’s not your role, your role is to answer my questions.”
Lum, Cho Wee Peng and the four independent directors – Teo Kiang Kok, Gay Chee Cheong, Christopher Murugasu and Lee Joo Hai – are each contesting the charge of Hyflux’s failure to disclose material information on the Tuaspring project, as was required under the listing rules of the Singapore Exchange (SGX).
Lum is accused of having consented to Hyflux’s intentional non-disclosure on Mar 7, 2011, by withholding information on the project.
Cho was allegedly complicit in Hyflux’s non-disclosure to SGX, while the four board members were said to be neglectful in this.
They allegedly failed to disclose that Hyflux was entering the power business for the first time, and that the Tuaspring project would draw the bulk of its top line from the sale of electricity; they also did not disclose that the profitability of the project would depend on electricity sales, which was supposed to subsidise the loss-making desalination operations of the project.
They each face a jail term of up to seven years, fine of up to S$250,000, or both, if convicted of this non-disclosure offence.
Lum and the four independent directors each also face another charge for Hyflux’s having omitted the same information in its statement issued for the offer of the 6 per cent preference shares on Apr 13, 2011. The prescribed punishment for this offence is a jail term of for up to two years, fine of up to S$150,000, or both.
