Hyflux founder, ex-CFO gave input to 'play down' energy details of Tuaspring

Drafts of a news release showed that Hyflux founder Olivia Lum and former chief financial officer Cho Wee Peng had given input to "play down" key details about the energy component of the failed Tuaspring project, a court heard on Aug 19.

- Grace Leong

E-mails which included these drafts formed a crucial part of the testimony of Ms Winnifred Heap Ah Lan, who took the stand on the fourth day of the criminal trial. Ms Heap was Hyflux's head of corporate communications and investor relations at the time.

According to the prosecution, Lum did not disclose information about the company's business risks because she did not want to detract from the positive news of winning a landmark water project, and feared deterring investors. The company's collapse due to weak electricity sales left about 34,000 investors of perpetual securities and preference shares, who had sunk in a combined $900 million, with nothing.

The first draft of the news release about Hyflux being named preferred bidder of the Tuaspring project said: "Integrated within the design of Tuas II desalination plant is a 350MW combined cycle gas turbine power plant which will supply electricity directly to the desalination plant."

It added: "The remaining capacity will be retailed through Singapore's wholesale electricity market, the National Electricity Market of Singapore, to electricity retailers and subsequently sold to contestable consumers."

The release also said that Hyflux will set up separate entities to undertake the power generation and energy retailing businesses. The company began working on the release about three months before the actual announcement on March 7, 2011.

But the prosecution showed that mentions of the sale of electricity were removed by the third draft. This draft was included in an e-mail sent by Ms Heap to Lum, Cho and former senior vice-president for legal (business) Yang Ai Chian on Jan 19, 2011.

In Ms Heap's e-mail, she wrote: "Make the changes following input from Olivia and Wee Peng. However, we still need to discuss on how much we need to disclose on the funding aspect."