Board director of Temasek’s subsidiary continues to sit on Hyflux board

On Sunday (31 Mar), the Straits Times published an article reporting on what some of the angry Hyflux investors told its reporters during the protest at Hong Lim Park, where at least 500 protesters had gathered on Sat (30 Mar). 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).

One of the investors, Mdm B. Chua, 62, lost $6,000 while her husband $100,000 investing in Hyflux preference shares and perpetual securities. 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.”

“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.

Temasek: We exited Hyflux well before issuance of Hyflux preference shares and perpetual bonds

After the news was reported, Temasek immediately wrote a letter to ST Forum to clarify. The letter was published yesterday (‘Temasek and its unit have not had investments in Hyflux since 2006‘, 1 Apr).

Mr Stephen Forshaw, Head of Public Affairs from Temasek International, wrote to say that Temasek’s investment in Hyflux was “part of an initiative during the early 2000s to invest in Singapore small and medium-sized enterprises”. It 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. “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 explain that Temasek continues to invest in Singapore SMEs via an independently managed fund, Heliconia Capital Management.

“Guided by its own board and management, Heliconia seeks to invest growth capital in Singapore-based SMEs. In addition to risk capital, Heliconia management also works with its investee companies on strategies and opportunities for regional or international growth,” he said.

“Neither Temasek nor Heliconia has had any investments in Hyflux since 2006.”

Heliconia board director continues to sit on Hyflux board

According to the information on its website, Heliconia Capital Management is a “wholly owned subsidiary of Temasek Holdings”.

One of its board director is Gay Chee Cheong who still sits on the Board of Hyflux:

And indeed, on Hyflux website, it also confirmed that Gay Chee Cheong is indeed a board director of Hyflux. Not only that, he also heads the Board’s Remuneration Committee in Hyflux, which meant that he has an influence over Hyflux CEO Olivia Lum’s salary package. In addition, he is also a member of the Nominating, Audit and Investment Committees in Hyflux:

Gay Chee Cheong was awarded the Singapore Armed Forces (SAF) Overseas Training Award. He attended the Royal Military Academy (RMA) Sandhurst and the Royal Military College of Science, Shrivenham (UK). He was also previously with Singapore Technologies Pte Ltd as the General Manager/Director of a joint venture company. He appears to have risen to the rank of Lieutenant-Colonel while he was with the SAF.

So, while “neither Temasek nor Heliconia has had any investments in Hyflux since 2006”, Heliconia’s board director Gay Chee Cheong continues to sit on Hyflux’s board.