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09 Mar 2019
Prime Minister Office
Negative View - 1760
A poison pill for Hyflux

A retail investor in Hyflux said that the government gave a poison pill to Hyflux. I asked him to explain his remarks.

He said that the government asked for tender for the Tuaspring project. It comprised a water desalination plant and a power generation plant.

If there was already an overcapacity in power generation, why did the government asked any party (Hyflux or others) to submit a tender for this project? Is it not giving them a poison pill?

Which successful tenderer would be able to make Tuaspring into a viable project - given the huge overcapacity in the electricity market?

Although the board of Hyflux should have done its assessment before tendering for the project, surely the government (through the Public Utilities Board) should also be aware about the big financial risk and the non viability. Should PUB take some responsibility for this outcome?

When Hyflux approached PUB in 2017 for permission to find another bidder for Tuaspring, why did PUB take a long time to reply? 

In the meantime, Hyflux was bleeding badly. As each month passed, the financial condition became worse. 

He quoted the example of a person who is injured in an accident. Should that person be attended immediately, or be allowed to bleed badly while the other people debate about other issues?

I tend to agree with his sentiment. 

I find that the government, through PUB and EMA, mismanaged the situation badly. It is very sad that the retail investors in Hyflux was made to suffer a large part of the financial loss.

He also asked - why was the Hyflux perpertual securities allowed to be sold to the retail investors - if the financial condition of Hyflux was already very bad at the time that it was launched. 

Who should be responsible for allowing the sale of these securities through the bank ATM?

Should the responsibility fall on the board of Hyflux, the Singapore Exchange of the Monetary Authority of Singapore? Who will act on behalf of these retail investors to bring up these issues? 

I asked him to get the investors to write to their elected members  to ask these questions in Parliament. 

Tan Kin Lian



 


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