Olivia Lum, CEO of troubled firm Hyflux, has volunteered to contribute her entire stake of 267 million Hyflux shares and securities as part of a proposed restructuring plan for the troubled water treatment company.
Lum and the company's board of directors stated their intention to contribute their stakes in it, as well as their entitlements as holders of preference shares and perpetual capital securities, to be "distributed solely to all other holders of perpetual capital securities and preference shares" once the plan is completed.
This announcement comes almost a week after the Securities Investors Association (Singapore), or Sias, raised a plethora of questions regarding Hyflux - from Lum’s large remuneration, even as the firm racked up debt and losses, to the "faults and defects" in its assets.
One of the issues it had flagged was whether Lum will have a role in Hyflux after its restructuring and why she was not contributing her gains from the company to this process.
Sias stated that Olivia Lum received over $60 Mn in dividends "in the time that shareholders and bondholders have seen their entire investment destroyed.” The regulator noted that in 2017, when Hyflux reported losses of $115.6 Mn, Lum received between $750,000 and $1 Mn in salary, benefits, and bonuses
In a statement, Lum said she and the board are "deeply aware of, and empathize with" stakeholders' unhappiness, adding that they have spent much time and effort in recent months to negotiate and secure a deal to save the company.
Lum said, "I have volunteered to give up receiving any management shares in the company. If this restructuring plan is approved, all of the interests of mine and the other board members in Hyflux will be given solely to this group."
Lum's entire stake in Hyflux represents about 34 percent or slightly over a third of the company's ordinary shares.
Lum’s offer comes just in time given that CEO compensation becomes a tricky issue especially when the company is going through troubled times. Meanwhile, Hyflux also revealed that it along with three of its subsidiaries - Hydrochem, Hyflux Engineering, and Hyflux Membrane Manufacturing - have filed applications to the High Court, to ask to convene a meeting. This will involve parties to whom they have financial obligations, so as to vote on a compromise or arrangement. Hopefully, this step would yield some significant results to assuage parties to which the firm is financially obliged.