On Sat (30 Mar), at least 500 people went to Hong Lim Park to protest against Hyflux. Many are looking at losing 80-97% of their life savings and retirement funds which they have invested heavily in Hyflux preference shares and perpetual securities (i.e, high-risk bonds).
So far, some estimated 34,000 retail investors have invested a sum of around $900 million dollars in Hyflux preference shares and perpetual securities offered via two tranches in 2011 and 2016. This sum is almost twice of the $500 million lost by the 10,000 retail investors in the Lehman Minibond saga back in 2008.
The media reported yesterday (31 Mar) that one of the investors, Mdm B. Chua, 62, had lost $6,000 while her husband $100,000 investing in Hyflux preference shares and perpetual securities. It was reported that they invested in Hyflux because “Temasek had invested” in the company.
Mdm Chua said, “We invested in Hyflux because government support for the company was very strong. We invested because Temasek had invested. And Temasek must have done its due diligence.” In other words, Mdm Chua thought the government and Temasek know everything and know what’s best for the country. The couple thought they could trust the government.
“When banks sold the securities to us, they told us ‘Temasek invested, so don’t worry. And if you don’t buy, somebody else will’,” Mdm Chua added. “Investors went in because it was a national asset.”
“Many of us had kept quiet initially. But I felt I had to come to the protest. We must voice that we do care,” she said. Indeed, many hold the same view as Mdm Chua.
After the news was reported yesterday, Temasek immediately wrote a letter to ST Forum to clarify. The letter was published today (‘Temasek and its unit have not had investments in Hyflux since 2006‘, 1 Apr).
Mr Stephen Forshaw, Head of Public Affairs from Temasek International, responded saying that Temasek’s investment in Hyflux was “part of an initiative during the early 2000s to invest in Singapore small and medium-sized enterprises”.
This was to “support their growth in promising sectors”, such as water technology, he said.
“Upon completion of its investment objectives, Temasek exited its Hyflux investment,” he clarified on behalf of Temasek.
“This was before 2006, as noted in the news article – well before the issuance of Hyflux preference shares in 2011 and their perpetual bonds in 2016.”
In other words, Temasek is saying that it had already got out of Hyflux before the issuance of Hyflux preference shares in 2011 and their perpetual bonds in 2016.
Mr Forshaw went on to say that Temasek does not have any investments in Hyflux since 2006.
It of course, begs the question should Temasek have come out to say something when banks and institutions were using its “good name” as a reference when they were selling Hyflux preference shares and bonds to retail investors in 2011 and 2016?
What do you think?