Olivia Lum may face legal action as Hyflux group lodges pre-emptive lawsuit

OLIVIA Lum Ooi Lin is staring at the possibility of legal action taken by the group of companies she founded as the beleaguered Hyflux group and its liquidators have lodged a lawsuit pre-emptively against her.

The case was filed by the mainboard-listed water treatment company Hyflux, together with 35 subsidiaries as well as the 2 liquidators from Borrelli Walsh who are in charge of winding up the group, after failed attempts by Hyflux to stave off liquidation.

A cause book search result showed that a writ of summons was filed in Singapore’s High Court on Mar 28, seeking a declaration against Lum with damages to be assessed. The cause book search result did not detail the declaration sought.

As chief executive, Lum helmed Hyflux group and also served on the board as executive chairman, before it went under judicial management.

Lum declined comment when approached through a source by The Business Times, but BT understands that the legal action by Hyflux and its liquidators is a protective writ, like the one the plaintiffs lodged against professional services firm KPMG which audited some of their accounts for several years prior to Hyflux seeking debt moratorium in 2018.

The plaintiffs alleged that KPMG had breached the contract, and they could possibly pursue claims that would include over S$400 million in dividends the listed company paid out between 2010 and 2018.

KPMG had stated in its earlier response when approached by BT that the writ is a “protective” writ and has not been served on the firm. Also, it noted the writ has not included a statement of claim - a document containing the relevant facts relied on by the plaintiff to establish its claim.

The liquidators of the Hyflux group have indicated to the court in the writ against KPMG that they have not ascertained if there are sufficient grounds to pursue the claims, but are filing a writ to try to avoid a time bar that would prevent any future claim, according to the response from KPMG to BT.

There are time limits for a party who wants to take out civil claims against another party. For example, the limit for actions concerning breach of contract or tort (a wrongful act such as negligence) is 6 years.

Eddee Ng of Tan Kok Quan Partnership represents the plaintiffs in both lawsuits, and he declined to speak when approached by BT. The cause book search result showed that no lawyers are on record for KPMG and Lum. This could be due to the writs having not been served on the defendants.

According to procedures, the plaintiff has to serve the writ on the defendant no later than 6 months from the date the writ is issued if the defendant is in Singapore.

The Monetary Authority of Singapore gave an update recently on the joint investigations launched in June 2020 into Hyflux and its directors for possible offences under the Securities and Futures Act, as well as non-compliance with accounting standards under the Companies Act. The authority stated that it is working with the Attorney-General’s Chambers to review the evidence.

The investigations include an extensive review of the announcements and financial statements issued by Hyflux from 2011 to 2018. The probe stemmed from a review into Hyflux’s disclosure, accounting and auditing issues concerning the Tuaspring Integrated Water and Power Project.