Coastal Oil CFO pleads guilty to defrauding 8 banks using forged invoices
WITH Coastal Oil Singapore facing severe cash flow problems since mid-2016, its chief financial officer - together with three others including co-director Tan Sing Hwa - conspired to use forged invoices to cheat banks here and in Hong Kong into disbursing US$320 million, the court heard on Monday.
Ong Ah Huat joined the wholesale distributor of petroleum and petroleum products in May 2016, and he soon learnt that Mr Tan had devised a scheme to obtain bank credit to address Coastal Oil's financial problems.
Instead of walking away, the accused participated in the conspiracy, duping China Merchants Bank in Singapore and seven banks in Hong Kong between June 2017 and December 2018.
The seven banks are Bank of Communications (Hong Kong), BNP Paribas SA (Hong Kong), Cooperative Rabbobank (Hong Kong), DBS Bank (Hong Kong), HSBC (Hong Kong), OCBC (Hong Kong) and Standard Chartered Bank (Hong Kong).
Coastal Oil was kept afloat using the ill-gotten gains until it went into liquidation in mid-December 2018. Weeks later, the ruse came to light when representatives of fuel intermediary Sinfeng Marine and OCBC Hong Kong lodged complaints to the police here.
Coastal Oil was alleged to have cheated OCBC Hong Kong of US$47.66 million using fictitious sales contracts and tax invoices to apply for letters of credit and loans, according to the OCBC fraud risk manager who made the police report.
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However, the prosecution was unable to establish the total amount of losses incurred by the banks in Hong Kong, while China Merchants Bank lost about US$10 million.
Ong was charged with a total of 58 offences - mainly abetment of forgery and cheating - last year. On Monday, he pleaded guilty to 15 of the charges. The remaining charges will be taken into consideration by the court for sentencing on next Monday.
The prosecution is seeking a nine-year imprisonment term for Ong.
Meanwhile, Mr Tan and an assistant treasury manager allegedly involved in the scheme had fled Singapore, while the case of treasury manager Huang Peishi who faces 63 charges is pending.
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