The criminal trial of Hyflux founder and former CEO Olivia Lum concluded on September 29 after nearly a year of proceedings, centered on the collapse of the water treatment company, one of Singapore’s most significant corporate failures. The defense is scheduled to indicate on October 21 whether it will submit a “no case to answer” motion.
Prosecutors allege that Lum, driven by her determination to secure the Tuaspring integrated water and power project in 2011, deliberately withheld material information from investors. Specifically, she is accused of concealing that the project’s profitability heavily depended on electricity sales, fearing this disclosure would discourage investment.
Hyflux was placed under judicial management in November 2020 and subsequently wound up in 2021. Its downfall left approximately 34,000 investors in perpetual securities and preference shares with losses totaling around S$900 million. The case highlights challenges related to project financing complexity, disclosure obligations, and investor protection mechanisms.
The prosecution, led by Deputy Chief Prosecutor Christopher Ong, called 22 witnesses over the course of the trial, including former Hyflux employees involved in corporate communications and representatives from financial institutions that negotiated Tuaspring’s funding. The evidence presented detailed how Hyflux won the Tuaspring bid by submitting the lowest tender, proposing to sell water to the Public Utilities Board (PUB) at an initial tariff of 45 cents per cubic meter—significantly undercutting competitors by at least 27%. However, this pricing approach evidently rendered the project unprofitable.
To offset losses, the prosecution contended that Hyflux planned for the power plant to supply electricity to the desalination facility while selling the bulk of the electricity output to the national grid. However, Hyflux lacked experience in power generation and electricity sales, adding financial exposure and market risk.
The trial began in August 2025 before Principal District Judge Toh Han Lian. Across 54 hearing days, the court examined why Hyflux did not disclose its substantial electricity market risks, its reliance on retail and institutional investors due to difficulties in securing bank loans, and how DBS bank proposed the issuance of preference shares as a fundraising mechanism.
In August 2025, the prosecution proceeded on 11 charges against six defendants, including Lum and four former independent directors—Teo Kiang Kok, Gay Chee Cheong, Christopher Murugasu, and Lee Joo Hai—as well as Hyflux’s former chief financial officer, Cho Wee Peng. While four Companies Act charges against Lum were stood down, two charges relating to her alleged consent to material nondisclosure under the Singapore Exchange (SGX) listing rules were pursued.
One charge asserts that Lum consented to the failure to notify SGX that Tuaspring marked Hyflux’s entry into electricity sales, an important factor influencing the project’s financial risks. If found guilty, she faces up to seven years in prison, fines up to S$250,000, or both. The second charge concerns omission of relevant Tuaspring information in a 2011 offer information statement for a S$200 million preference share issuance, carrying a maximum penalty of two years’ imprisonment and fines up to S$150,000.
The four former independent directors face charges of neglect in failing to ensure proper disclosure of Tuaspring-related information as required under listing rules, including omissions in the 2011 offer information statement. Another director, Rajsekar Kuppuswami Mitta, pleaded guilty in August 2025 to a neglect charge linked to a March 2011 SGX announcement.
The trial’s outcome is now pending further submissions, with a ruling expected following the defense’s indication on October 21.