Hyflux CLOB saga and Hyflux saga
Many people have bitter memories of the Clob saga in 1996. They lost large sums of money on investing in Clob shares. They remembered that Dr. Mahathir was the person responsible for their large losses. Even their children remembered the saga, as they saw their parents suffered the large losses.

During that period, most people were emotional about the steps taken by Dr. Mahathir. They said that he was out to fix Singaporeans. I had the same impression at that time.

Recently, I did some research into the Clob saga. I found this article from MAS. It contained some useful facts.  I also found this post which explained the saga from another perspective and contained links to several articles about this saga.

The total amount invested in the CLOB shares, i.e. the shares in Malaysian listed companies that are traded on the CLOB exchange in Singapore, was US$4.47 billion (S$ 7.4 billion at that time). Most of the shares were held by Singapore individuals.

In 1998, Malaysia introduced currency control to avoid the collapse of the ringgit. They had to freeze the CLOB shares to prevent the dumping of the shares that could depress the prices of these Malaysian share on the  KL stock exchange. 

It seemed that they were not out to fix the Singapore investors. Instead, they were trying to minimize the damage to their stock exchange and economy. Sadly, that is not what the people in Singapore felt during those tumultous days. 

It took a few years to sort out. I do not know how much was eventually lost by the investors. If it was (say) 30%, the loss would have been $2.2 billion.

I wanted to work out this number, to compare with the potential loss of $900 million by investors in Hyflux (assuming that they are not able to get back any money).

I wanted to say that the losses in Hyflux may not be as large as CLOB shares, but it is almost half of the CLOB losses.  Of course, the value of money during the time of CLOB is much higher than today.

While many people were bitter with the CLOB saga, they may not be aware that the Hyflux saga is also of a large magnitude, although not as large as CLOB. 

Okay, CLOB was 8.0 on the Richter scale, but Hyflux probably 6.5. Hyflux is still a large disaster that has caused a lot of damage.

During the CLOB saga, I do not remember non-investors saying that the CLOB investors should have known the risk of trading in CLOB shares. The government at that time did what they could to help the investors. The investors received the support and sympathy of the non-investors.

I hope that the same help and support could be extended to the Hyflux investors today, by the government and the non-investors.

Tan Kin Lian
 

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