Very few Hyflux investors used CPF to buy shares

CPF members hold less than 3% of its ordinary shares and less than 3% of its preference shares

Only a small minority of Hyflux investors had used their Central Provident Fund (CPF) savings to buy shares in the troubled water treatment company.

CPF members held less than 3 per cent of Hyflux ordinary shares and less than 3 per cent of its preference shares, said a CPF Board spokesman on Tuesday.

They could not use their funds to buy Hyflux perpetual securities as this option was not available through the CPF Investment Scheme (CPFIS), a voluntary programme for members who are prepared to risk losses to seek potentially higher returns.

"Under CPFIS, members may invest in a wide range of investment products depending on their investment objectives, risk appetite and tolerance level," the spokesman said.

A CPF member can invest his savings only after setting aside $20,000 in his Ordinary Account and $40,000 in his Special Account.

Investment limits are also imposed to avoid concentration risks, the spokesman added.

For example, members can invest only up to 35 per cent of their Ordinary Account's investable savings in buying shares.

 
 

About 3,000 CPF members were reported to have used their savings to buy ordinary and preference shares in Hyflux.

Hyflux last week aborted a $530 million investment deal with would-be rescuer SM Investments on the eve of a critical creditors' vote scheduled for last Friday, throwing its own future into doubt.

Its liabilities were $2.95 billion as of March 31 last year.

Unsecured investors stand to lose everything if the water treatment company fails in its debt restructuring attempt and is liquidated.

The saga surrounding Hyflux has also caught the eye of financial regulators, who are looking into whether the water treatment company has breached any rules, according to a previous Straits Times report.

  • 3,000

  • Number of CPF members who were reported to have used their savings to buy ordinary and preference shares in Hyflux.

The Monetary Authority of Singapore and the Singapore Exchange said they are keeping a close watch on developments at the debt-laden business. Hyflux's shares have been suspended since May last year, pending a restructuring effort.

"If there is any evidence of potential breaches of the law or regulations, including any potential disclosure lapses, we will investigate and take appropriate actions," both agencies said.

The Accounting and Corporate Regulatory Authority, which enforces auditing and accounting laws and standards, has also said it is monitoring the Hyflux quagmire closely and will assess whether further action is warranted.