Desperate retail investors yesterday (Mar 30) took to the country’s only approved protest site Hong Lim Park, pleading the government to help them.
The Hyflux investors at the rally opposed the new restructuring proposal by Indonesian conglomerate Salim and Medco Group, which would see shareholders losing up to 90% of their capital, while bondholders will lose up to 75%.
The Monetary Authority of Singapore has earlier literally abandoned the investors, with a drop line saying:
“All investments carry risks and that businesses can come under financial stress.”
While different investors wanted different outcomes, all said they want the government to bail out Hyflux and return them their capital. Some wanted Hyflux to be completely liquidated, while some opposed the government’s plan to take over Tuaspring deslination plant at zero dollars. Everyone was also indignant about the government protecting the rich, and especially Hyflux CEO Oliva Lum, who managed to keep her million dollar salaries.
With the exception of plainclothes police who were on standby to arrest any unruly participant, there was however no government representative to listen to the rally participants.
The poorly-facilitated rally site with numerous police cameras had only a small mole hill for the organisers, with no audio-amplifying speakers or covered shelter. Over 200 people, consisting of mostly senior citizens who invested in Hyflux shares or bonds and plainclothes police, attended the rally at 3pm yesterday.
3 plainclothes policemen approached the crowd at around 4pm and “advised” they disperse. The rally participants quickly left the scene after being “advised”.
Most investors, including some 3,000 CPF account holders, placed their money in Hyflux as its CEO Olivia Lum is a known crony and personal friend of the Prime Minister’s wife Ho Ching. Many thought that Hyflux had prospects because it owns the country’s desalination plant, Tuaspring, which supplies up to 17.5% of Singapore’s water daily needs.
The investors were however misinformed and unaware that the government had depressed the purchase price of desalinated water, at as low as S$0.45/m³, which the government resold to the public for S$2.74/m³. The profits of Tuaspring, was designed to come from its 420MW power plant, which sells excess electricity to the government. The plan failed after energy prices plummeted due to falling oil prices, landing Tuaspring plant at least a hundred million in losses every year.