When questioned, Ms Heap said this analyst appeared not to be part of the usual players and may or may not have been invited to a briefing for analysts on Mar 7, 2011, the day of the announcement of the project win.
She added that the analyst’s firm did not appear to be local.
Mr Singh showed Ms Heap an email that she had sent to Lum and Cho around the time of the announcement, with the subject “Indian analyst”. In her email, she said the analyst “called again”.
“Basically he did his calculations and came to conclusion that; we only need about 60MW, therefore the bulk needed to be sold to the merchant market. Also he reckoned that it would be difficult for us to get teens IRR if we didn’t sell to the grid,” wrote Ms Heap in her email.
She added that the analyst also wanted to know how Hyflux would be “recognising our power revenue”, to which she told him that both plants were integrated under one project and one special purpose vehicle.
She added that she had highlighted to the analyst that “power is an expansion of our water strategy and very integral” and therefore “should not be viewed in isolation”.
Mr Singh took Ms Heap through other analyst reports that recommended “buy” for Hyflux stock, including reports from DBS Group Research Equity and Kim Eng.
One report by JP Morgan stated that the sale of excess power would be much more than half of the power generated by the power plant, indicating that the analyst was aware of the power generation aspect.
After Mr Singh concluded his cross-examination of Ms Heap in the late morning, Mr Thong Chee Kun from Rajah & Tann briefly cross-examined her on behalf of his client, Cho.
Mr David Chan from Shook Lin & Bok, who represents the remaining four independent directors, will conduct his cross-examination on Wednesday afternoon. After this, the prosecution will do a brief re-examination of Ms Heap.
The next witness to take the stand is from PUB. His evidence will be entirely in camera – in private – for reasons of national security concerning water prices.
If convicted of consenting to Hyflux’s intentional failure to disclose the electricity sale information to the securities exchange, Lum could be jailed for up to seven years, fined up to S$250,000 or both.
For making an offer of securities to the public with omissions about the electricity sales, she could be jailed for up to two years, fined up to S$150,000, or both.
