SINGAPORE — Drafts of a news release showed that Hyflux founder Olivia Lum and former chief financial officer Cho Wee Peng had given input to "play down" key details about the energy component of the failed Tuaspring project, a court heard on Aug 19.

E-mails which included these drafts formed a crucial part of the testimony of Winnifred Heap Ah Lan, who took the stand on the fourth day of the criminal trial. Heap was Hyflux's head of corporate communications and investor relations at the time.

According to the prosecution, Lum did not disclose information about the company's business risks because she did not want to detract from the positive news of winning a landmark water project, and feared deterring investors. The company's collapse due to weak electricity sales left about 34,000 investors of perpetual securities and preference shares, who had sunk in a combined $900 million, with nothing.

The first draft of the news release about Hyflux being named preferred bidder of the Tuaspring project said: "Integrated within the design of Tuas II desalination plant is a 350MW combined cycle gas turbine power plant which will supply electricity directly to the desalination plant."

It added: "The remaining capacity will be retailed through Singapore's wholesale electricity market, the National Electricity Market of Singapore, to electricity retailers and subsequently sold to contestable consumers."

The release also said that Hyflux will set up separate entities to undertake the power generation and energy retailing businesses. The company began working on the release about three months before the actual announcement on March 7, 2011.

But the prosecution showed that mentions of the sale of electricity were removed by the third draft. This draft was included in an e-mail sent by Heap to Lum, Cho and former senior vice-president for legal (business) Yang Ai Chian on Jan 19, 2011.

In Heap's e-mail, she wrote: "Make the changes following input from Olivia and Wee Peng. However we still need to discuss on how much we need to disclose on the funding aspect."

When asked what she was trying to convey, Heap said there was a "typo" in the e-mail. She said it should have been: "Made the changes following input from Olivia and Wee Peng", as these changes had already been discussed.

Deputy chief prosecutor Christopher Ong also asked why the reference to the sale of electricity had been taken out.

"Any significant changes to the announcement would have been directed by Olivia and Wee Peng," she said. "This is one of the key points that we are not in a position to take out. Mei Kiang and myself don't have the authority to take this out of the press release."

She was referring to Seah Mei Kiang, who was with Hyflux's corporate communications department.

When asked why the sale of electricity was a key point, Heap said: "Because the excess capacity will be sold to the grid, and analysts and investors want to know how much will be sold to the grid, whether you have the track record and the people who can execute the strategy."

In the fourth draft of the news release, Heap wrote: "Attached is the cleaned up draft for news release and presentation following input from Olivia and Wee Peng. The key is to play down energy while highlighting our expanded bench strength and core capabilities." This draft was included in an e-mail sent by Heap to Lum, Cho, Yang and Seah on Feb 8, 2011.

When the prosecution asked whose idea was it to "play down energy", Heap said: "It is indicated in the e-mail — 'following input from Olivia and Wee Peng'."

The draft was later sent to national water agency PUB for vetting. It added these sentences to the news release: "Hyflux will also be constructing a 411MW combined cycle gas turbine power plant to supply electricity to the desalination plant. Excess power will be sold to the power grid." These sentences appeared in the final version that was sent to the Singapore Exchange.

Heap said these lines would have come from the PUB.

The prosecution also took Heap through an e-mail exchange between Seah and a journalist named Robert Clow.

Clow, in his e-mail on March 31, 2011, had said: "I understand the banks working on the Tuas project would like to delay Hyflux's signing of the deal - scheduled for April 6 - because they fear that the three-month financing deadline, which comes into force after signing could be too tight. Specifically, I understand the banks are concerned that selling power into the Singapore merchant market to subsidise the desalination process will make the projects' cash flow uncertain and difficult to model."

Clow's e-mail was forwarded by Seah to Heap, Cho and Yang. Cho, in response to Seah, said: "The discussions between Hyflux and the banks are in progress and confidential and are (sic) unable to comment further at this time."

Lum, who was subsequently included in the e-mail chain, said: "We should refrain from giving any specific reply. Just give no comment."

When asked why Lum gave the instruction to not comment on the matter, Heap replied: "Clow is a journalist. I suppose sometimes there is no obligation to reply."

For the final 45 minutes of the Aug 19 hearing, Heap was also cross-examined by Lum's lawyer, Senior Counsel Davinder Singh. Singh spent much of the time questioning Heap on the accuracy of her memory of events that took place more than 15 years ago.

At several points during the cross-examination, Singh told Heap to "not talk over him", as she would interrupt him before he could finish asking a question.

"Because the events you were asked about go back more than 15 years, you have said repeatedly that you are unable to recall many things. Would that be fair?" he asked at the opening of his cross-exam.

Heap replied: "Fair in the sense that when there's no e-mail evidence, it is difficult to recall. Even if there are things in writing, there's difficulty recalling."

He then asked if she could recall when Sam Ong, the former chief financial officer and former deputy chief executive, left the company. Heap said she could not.

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When asked why she could not recall if the board of directors had been involved in the announcements, Heap replied: "Because I am not involved in the process of sending the announcements to the board."

On the Jan 19, 2011, e-mail which included the third draft of the news release, Singh asked: "Do you agree with me that you were not asked whether there is a mistake in the e-mail?... Although you were not asked if there is a mistake, you volunteered an answer?"

Heap replied: "Yes, it looks wrong."

"Are you aware that there is evidence in this court by an investigating officer about whether the word in that e-mail is 'Made' or 'Make'?" Singh asked. He was referring to testimony from the Commercial Affairs Department's lead investigating officer, Jacqueline Wei Maojun. She was the prosecution's first witness.

To which, Heap said: "No I am not aware."

Singh asked her to explain why she volunteered the information that there was a typo in the e-mail, when the question originally posed to her was on why the e-mail was sent.

Heap replied: "I told them there was a typo. In my mind, I just wanted to clarify there was a typo."

"Isn't it a position that you came to court to volunteer that information, regardless of whether you were asked?" Singh said.

She replied: "I wouldn't come to court to volunteer this information."

Singh said: "Your evidence is that not knowing you were going to be asked in court or not, you came prepared to volunteer that evidence?

Heap agreed.

The hearing continues.

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This article was first published in The Straits Times. Permission required for reproduction.