Hyflux woes worsen as Singapore regulators review disclosures

Pic by Straits Times, Singapore

SINGAPORE: Singapore authorities said they are reviewing debt-laden water treatment company Hyflux's disclosures to see if the firm has breached any laws.

The review adds another complication for Hyflux, which is under a court-supervised restructuring process, and recently had a rescue by an Indonesian investor called off, throwing its future into doubt.

The Monetary Authority of Singapore, the Accounting and Corporate Regulatory Authority and the Singapore Exchange Regulation together said on Tuesday they are "reviewing Hyflux-related disclosure issues, as well as compliance with accounting and auditing standards."

The review is "to determine if there have been breaches of listing rules and/or the relevant laws and regulations," they said, without giving details or saying what prompted the review.

A spokeswoman for Hyflux Ltd, which operates an important water source for Singapore, told Reuters in an email that the company will be "cooperating fully" with their queries.

Hyflux has faced pressure to explain its disclosures since its debt restructuring began last May, said Ang Chung Yuh, a fixed income expert at investment platform iFast Corp in Singapore.

The Securities Investors Association of Singapore, representing security holders, had previously questioned how Hyflux's auditors signed off on its annual report just two months before it filed for court protection.

The association also queried how it was able to report profits prior to 2017 despite lacking cash.

Hyflux's debt stood at about S$1.67 billion ($1.2 billion) at the end of September.

Earlier this month, Hyflux said that a lifeline deal with its prospective Indonesian investor, SM Investments, had been terminated. On Monday, Hyflux took legal action against SM investments for abandoning the deal.

Hyflux's Tuaspring plant is the largest of three desalination plants in Singapore and an important water source for the city state.

PUB, Singapore's water agency, has warned Hyflux that it may take over the plant if the company does not fix its contractual defaults by April 30. - Reuters