Not just any fat cat sir. Even Nippon reporters also say you all greedy or gullible. So old loh cannot be so irresponsible. You all need to elucate yourselves before putting money into strangers' hands, otherwise even the PAP can't save you.
While retail investors may have been gullible or greedy, Mukherjee asserted that the blame does not lie entirely on them and that “Hyflux shouldn’t have been allowed anywhere near yield-starved Singapore retail investors in 2016.”
Mukherjee’s source S&P Global Ratings said that the numbers in 2016 “already suggested that the company’s capital structure was hardly sustainable, with a ratio of net debt to Ebitda above 10x in 2015 and negative Ebitda in 2014, driven by performance issues at the company’s Tuaspring desalination and power plant.”
S&P Global Rating’s assessment and Mukherjee’s views appear to match that of Mak Yuen Teen, an associate professor of accounting at the National University of Singapore.
In a recent interview with the national broadsheet, Mak said that ordinary shareholders and creditors could have chosen to get out of Hyflux earlier if the audit firm had given an adverse opinion. He added: “It is often the case here that auditors do not challenge assumptions enough.”
Shareholders and investors are also asking why Hyflux’s audit firm gave the organisation a clean bill of health in its annual reports over the last decade, instead of flagging up the risk that Hyflux would become embroiled in heavy debt.
KPMG has audited Hyflux since 2008. Hyflux slipped into the red for the first time in 2017 since it was listed in 2001. Two months later, it filed for bankruptcy protection.
The move shocked investors who had believed the company was healthy. Indeed, Hyflux’s financial statements before this point did not give cause for concern since it was prepared on the basis of an accounting method that assumes the company will remain solvent and operational indefinitely until proven otherwise.