SCI takes S$54m hit from criminal, civil claims over China wastewater discharge

SEMBCORP Industries (SCI) faces S$54 million in fines and cash settlement from legal proceedings over the discharge of off-specification wastewater by its 95 per cent-owned joint-venture company in China, Sembcorp Nanjing Suiwu. 

However, no further financial impact is expected, as the amount has been fully provided for as at end-September 2019, SCI said in a Friday bourse filing after trading hours. 

Sembcorp Nanjing Suiwu, which is involved in wastewater treatment, was fined S$10 million in the fourth quarter of 2019. It has also reached a civil settlement agreement with the local authorities, which is expected to be finalised in February 2020, SCI disclosed in the filing.

SCI said that it "deeply regrets that the illegal and isolated activities of a few employees of the joint-venture company for a period prior to early-2017 had resulted in this incident". The employees have since been charged and sentenced by the court in their individual capacities, it added. 

"The incident was thoroughly investigated by management. All necessary steps to further strengthen internal controls and processes were undertaken. The facility is in compliance with all regulatory standards," SCI said. 

Separately, SCI added that Sembcorp Nanjing Suiwu will be committing to new investments worth about S$45 million over the next four years for projects and initiatives that support environmental protection in the country. 

In 2018, it had estimated that its proportionate share of the total potential fines and claims could amount up to S$100 million, including the provision of S$25.4 million previously made in its FY2017 financial statements.

SCI shares closed at S$2.32 on Friday before the announcement, up 0.43 per cent.