IN a letter to the board of Hyflux and its executive chairman and group chief executive Olivia Lum on Friday, Securities Investors Association Singapore (SIAS) chief David Gerald wrote that he was "seriously concerned" that questions regarding the operations, valuation and accountability of the board of directors have not been addressed.
He requested that Hyflux respond to the list of questions in the letter to help securities holders make an "informed decision" with respect to the restructuring.
In it, he queried the board on how it could justify her "large remuneration" given the firm's financial position and the performance of the group.
The total amount paid to Hyflux's key executives for the financial year ended 2017 was S$2.7 million, with Ms Lum receiving between S$750,000 and S$1 million.
Noting that every Hyflux asset has material faults and defaults, Mr Gerald also questioned the board on the scrutiny the firm applied to the operations of its main assets and why these faults were not described or announced in annual reports.
The assets include Qurayyat and Magtaa which have operational defects and cannot operate at or close to capacity. Tuaspring and Tianjin Dagang are lossmaking and cannot service their debt with cashflow from operations, while TuasOne and Tlemcen are not complete.
Mr Gerald queried the board on why Hyflux's negative operating cashflow since 2009 was not highlighted to bondholders and shareholders. He also asked why dividends continued to be paid out during that time.
He noted that "in the time that shareholders and bondholders have seen their entire investment destroyed, Olivia Lum has received over S$60 million in dividends from her 34 per cent ordinary shareholding in Hyflux.
The board was also asked the rationale behind Hyflux's "rushed timetable" as it released the restructuring terms one month before the intended scheme meeting, allowing "very little time" for investors to evaluate the deal.
On Feb 1, the water-treatment company had called on its creditors to file their proof of claims ahead of scheme meetings. The proofs, which will form a basis to vote on scheme proposals and to receive payments, have to be submitted by 5pm on Feb 15.
Maybank, Hyflux's secured lender, has also given the firm until Feb 28, 2019, to execute a binding agreement with a successful bidder or investor, an extension of the Oct 29, 2018, deadline earlier agreed upon.