atans1

A really curious incident

In Corporate governance, Financial competency on 15/02/2019 at 4:54 am
The silence of a self-proclaimed watchdog: only KPKBing when Hyflux was bust.
SIAS raises questions about Hyflux CEO’s remuneration amid financial troubles

Despite reporting losses of S$115.6 million in 2017, troubled water treatment firm Hyflux spent about S$2.7 million on remuneration for its key executives, with CEO Olivia Lum receiving between S$750,000 and S$1 million in salary, benefits and bonuses.

In addition to this “large remuneration”, Ms Lum also received more than S$60 million in dividends “in the time that shareholders and bond holders have seen their entire investment destroyed”, according to the Securities Investors’ Association (Singapore) (SIAS).

Highlighting these points, SIAS asked why the Hyflux founder – which has 34 per cent ordinary shareholding in the company – did not contribute her gains to the restructuring process. The investor watchdog also asked if Ms Lum would have any role in the Hyflux group after the firm’s restructuring.

These were just two of more than 40 questions put to Ms Lum and the Hyflux board by the investor watchdog in a letter issued on Monday (Feb 11) and signed off by its President and CEO David Gerald.

“SIAS, representing the interests of the numerous stakeholders of various securities, is seriously concerned that many questions regarding the operations, valuation and accountability of the board of directors of Hyflux have not been addressed, so as to help securities holders make an informed decision, with respect to the restructuring,” Mr Gerald said.

Read more at https://www.channelnewsasia.com/news/singapore/hyflux-questioned-over-ceo-olivia-lum-remuneration-financial-11229034

Like real, barking after things went wrong. Not when things were going wrong and things could possibly be done to rectify the situation. Talk of bolting the stable door after the horse bolted.

 

If SIAS was my watchdog, I’d have shot it. The audited accounts raised many red flags. It’s not as though, the debts, and cashflow issues were hidden. All public knowledge. So was thisBS?

“Hyflux Group has generated negative operating cashflow in every year since 2009. Was this highlighted to bondholders and shareholders? If so, in what form? Why did the Board continue to pay dividends, when the operating cashflow was negative and accumulate more debt during this time?”

The investor watchdog also highlighted that Hyflux, despite the negative operating cashflow, reported profits in each year before 2017 and asked how this was possible.

Whatever, I’ll return to the fact that it kept quiet earlier: why?

Gregory (Scotland Yard detective): “Is there any other point to which you would wish to draw my attention?”

Holmes: “To the curious incident of the dog in the night-time.”

Gregory: “The dog did nothing in the night-time.”

Holmes: “That was the curious incident.”

Silver Blaze by  Sir Arthur Conan Doyle

  1. It isn’t a watchdog. The SIAS has no powers because it is an association not a regulatory agency. All it can do is kpkb.

  2. Ex post corporate scandals are good for it as it helps generate bumper crop of new fee-paying members LOL!

    No one would bother paying ex ante unless compulsory like NS, although scandals have been rising on the SGX over last 10 yrs.

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