Hyflux lawsuits against Olivia Lum, KPMG proceeding

THE lawsuits that Hyflux pre-emptively filed against its founder Olivia Lum Ooi Lin and KPMG are proceeding after all, as statements of claim against Lum and the professional services firm have recently been filed.

Defences from Lum and KPMG, represented by Davinder Singh Chambers and TSMP Law respectively – a cause book search result showed – are pending.

Hyflux, with its 35 units, had earlier in March lodged writs of summons against the 61-year-old Lum and KPMG, but there were no statements of claim, nor were the writs served on the defendants then. KPMG had noted in its earlier response to The Business Times (BT) that the writ was lodged to avoid a time bar that would prevent any future claim.

However, the statements of claim by Hyflux – which provide the relevant facts it is relying on to establish its claim – have since been filed, BT understands. The plaintiffs in both cases are represented by Eddee Ng of Tan Kok Quan Partnership.

A search by BT of the cause book showed that the mainboard-listed Hyflux, Hydrochem and Tuaspring are the only plaintiffs remaining that have a pending lawsuit each against both Lum and KPMG, after other units in the Hyflux group discontinued their legal actions.

The plaintiffs allege that KPMG had breached the contract, and they are pursuing claims that would include dividends the company paid out between 2012 and 2018 to its shareholders, according to the cause book search result. Hyflux had paid out hundreds of millions of dollars in dividends during that period.

Their lawsuit against Lum is for a declaration against her with damages to be assessed, the cause book search result showed, without any details.

The High Court had granted the plaintiffs in May a temporary stay of the proceedings against Lum until September, one of her lawyers, Jaikanth Shankar, told BT then, as the plaintiffs had said “they need more time for their investigations and to take legal advice”.

Shankar said then that Lum’s position was that there was no basis both to file the writ in the first place, and for any claims against her.

Lum, former chief of Hyflux, has also been prosecuted alongside the former chief financial officer and four former independent directors, while the Accounting and Corporate Regulatory Authority is finalising the outcome of its inspection on the audits by KPMG in its role as Hyflux’s external auditors.

Hyflux was ordered by the court to be placed under judicial management in November 2020 and be wound up in July 2021, after the company failed to secure a white knight despite numerous attempts while it was under a debt moratorium for almost two years.

After the company ventured into the energy business through the Tuaspring desalination plant, its financial difficulties started surfacing as the plant chalked up losses amid low electricity prices and a challenging macro environment.