HYFLUX&rsquo S civil lawsuits against the company&rsquo s founder Olivia Lum and former auditor KPMG will be tried jointly, after the High Court granted Lum&rsquo s application.

 

Justice Goh Yihan, in a judgment published on Monday (Mar 25), said he agreed with Lum that a joint trial of the Hyflux claims will &ldquo save costs, time and effort, as well as promote convenience&rdquo .

 

&ldquo Crucially, the plaintiffs rely on the same pleaded facts in support of these causes of action&hellip Similarly, the plaintiffs also claim to have suffered almost identical losses in both suits,&rdquo Justice Goh said.

 

KPMG supported the application for a joint trial because there are common questions of law and fact which arise in the suits.

 

Hyflux&rsquo s counsel had objected to having the claims heard before the same judge at the same time, arguing that there are a number of non-overlapping issues in both the suits that are key and substantial.

 

However, Justice Goh pointed out that the overlapping issues are key and substantial.

 

Beleaguered Hyflux and two subsidiaries Hydrochem (S) and Tuaspring, as well as liquidator Cosimo Borrelli filed a lawsuit in 2022 against the group&rsquo s former chief executive Lum, seeking at least S$690.6 million in claims over her alleged breach of fiduciary duty.

 

Borrelli is the liquidator of Hyflux and Hydrochem. He is not one of the three plaintiffs in the suit against KPMG.

 

Against KPMG, the two Hyflux companies and Tuaspring alleged that the professional services firm had breached its duty to exercise reasonable skill and care in carrying out its audit work in relation to its audit of the financial statements for 2011 to 2017, which were said to have been materially misstated. They are seeking more than S$684.6 million in claims.

Hyflux independent director Lee Joo Hai is contesting the latest charge, IPC Corporation, of which Lee is an independent director, said in a bourse filing on Friday. 

 

AN INDEPENDENT director of Hyflux, Lee Joo Hai, has been further charged under Section 253 of the Securities and Futures Act, which outlines criminal liability for false or misleading statements.

Lee is being investigated amid potential lapses in disclosures by Hyflux on its Tuaspring Integrated Water and Power Project, and possible accounting irregularities.

Lee is contesting the charge, property company IPC Corporation, of which Lee is an independent director, said in a bourse filing on Friday (Jun 16).

 

In March, he was charged with one count of neglect as an independent director under the Securities and Futures Act, The Business Times reported in May.

His alleged neglect resulted in Hyflux on Mar 7, 2011, intentionally failing to notify the bourse that the Tuaspring project was its expansion into a new business of selling electricity.

The water treatment company also failed to disclose that the plant&rsquo s profitability was contingent on electricity sales revenue, which was projected to make up a significant proportion of its overall revenue.

IPC Corporation on Friday said its business and operations are unaffected by the Hyflux investigation. Its nominating committee has said that the recent charge does not compromise Lee&rsquo s duties, as Lee has conducted himself professionally since his board appointment.

&ldquo Notwithstanding the charge, the nominating committee and the board (both with Mr Lee abstaining) are of the view that the character and integrity of Mr Lee remain suitable for him to continue as director of the company,&rdquo IPC said.

HYFLUX Membrane Manufacturing and Hyflux Engineering have been ordered on Tuesday (Mar 28) to be wound up upon a successful application by the now-defunct water treatment firm Hyflux.

 

Tan Kok Quan Partnership, representing Hyflux as the claimant in the winding-up applications, told the High Court that the two Hyflux subsidiaries have not been able to pay the debt it is seeking to recover, without stating the overdue amounts and the circumstances in which these were incurred.

 

Hyflux Membrane Manufacturing and Hyflux Engineering also have current liabilities exceeding current assets, thereby satisfying the cash flow test, the court heard.

 

Justice Aedit Abdullah noted that no one opposed the petitions to wind up the two Hyflux companies.

 

Hyflux, in February, issued notices in the Government Gazette on these applications, informing any creditor or contributory of the company desiring to support or oppose the winding-up attempt to appear at the hearing.

 

Tan Kok Quan Partnership counsel did not want to comment when approached by The Business Times.

 

Hyflux Membrane Manufacturing and Hyflux Engineering were originally part of the Hyflux group of 36 companies that brought legal actions against founder and former chief executive Oliva Lum as well as their former independent auditor KPMG. Of these, 16 companies are already in liquidation and one is under receivership.

 

Ultimately, only Hyflux, Hydrochem and Tuaspring proceeded with the lawsuits as plaintiffs.

 

Hyflux was placed under judicial management in November 2020, and the High Court in July 2021 approved its winding up, after it failed to secure a white knight while under a debt moratorium for almost two years. 

 

Its liquidators declared an interim dividend of 1.568 per cent to all of its unsecured creditors in December 2022 while the dividend rate based on the total nominal value of S$265 million worth of notes was about S$0.01734 per note. The liquidators had received total proof of debt amounting to around S$1.5 billion.