Is it true that the Hyflux retail investors are primarily from the Merdeka generation?

By March 30, 2019 February 24th, 2020 Business

We are unable to verify this to be correct.

Today we were alerted to the activities of a Facebook group known as the “Hyflux Retail Investor Group”. This is not an official Hyflux page and is certainly not commissioned by Hyflux – A water treatment company in Singapore presently facing a serious threat of insolvency and is attempting to work out settlements with creditors and investors in what is known as a “Scheme of Arrangement”.

This Facebook group claims that: “Hyflux investors are primarily The Merdeka Generation (with a few Pioneers Gen and GenX additions). There are 34,000 of them. The Merdeka Gen’s journey with Hyflux has been a tumultuous one. Their investment has almost lost all of its value and they are worried about their future.

Now Hyflux will be sold to Indonesian group Salim. And these Merdeka Generation will lose almost all their money. For every $1 of their life savings and CPF that they had placed in Hyflux, they are only getting 10cents back (3cents in Cash and 7 cents in shares) and they lose 90% of their money. The lives of this lot of Merdeka Generation are about to be ruined.”We are unable to verify the above information relating to the Merdeka Generation. We sound a note of caution against believing the above statement by this group because:-

(1) This group is focused on highlighting an alleged plight facing 34,000 Merdeka (or older) generation citizens who are investors. It aims to use this to garner sympathy from others to pressure and secure a government bailout. The group wants this purely because it disagrees with Hyflux’s aim of obtaining a lifeline of S$530 million from SM Investments Pte Ltd. – There is a possibility of bias.

(2) No evidence has been furnished to explain how is it that all (or most) of the 34,000 subordinated debt creditors are from the “Merdeka generation”. – There is a possibility of untruth.

(3) In addition to the above, the article is not being clear on whether these investors were misled (similar to the Lehman Bros’ crisis in 2008) and whether the “Merdeka generation” investors were hoodwinked into holding on to their investments or that they had taken a calculated risk with their investment – There is the possibility of misleading the reader.

We understand that the 34,000 retail investors are bondholders and, in gist, had lent on the basis of what is known as “subordinated debt”. This itself means that it is a debt that is not taken into consideration until other debts are paid off first. If the 34,000 had agreed to these terms, they cannot be crying foul if the market has turned against them. If there are accusations to be made against Hyflux’s management, these should be taken up with the SIAS or Hyflux themselves.

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