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Two Coastal Oil ex-senior staff charged with cheating banks; reported losses amount to US$133m
TWO former employees of crude oil products supplier Coastal Oil Singapore were charged in court on Friday for allegedly cheating eight banks in Singapore and Hong Kong. The Business Times (BT) understands that the reported losses among the banks amount to US$133.3 million.
The only Singapore branch to have suffered a loss is China Merchants Bank (CMB), BT understands.
The accused are Singaporeans Ong Ah Huat, 60, and Huang Peishi, 34, court documents seen by BT on Friday show.
Other banks named in the documents are DBS Bank (Hong Kong), OCBC (Hong Kong), BNP Paribas (Hong Kong), Cooperative Rabobank UA (Hong Kong), Bank of Communications (Hong Kong), HSBC (Hong Kong) and Standard Chartered Bank (Hong Kong).
DBS Singapore and OCBC Singapore declined to comment when approached by BT on Friday.
The Singapore Police Force (SPF) had said in a press statement on Thursday night that two individuals would be charged for their suspected involvement in a series of cheating offences involving over US$340 million in loans disbursed to a company by eight banks.
SPF did not identify the individuals or the company in its statement, but said that the 60-year-old man was the company's former chief finance officer while the 34-year-old woman was its former treasury manager.
The duo allegedly created fictitious sales contracts and invoices to obtain financing from the banks between July 2017 and December 2018, investigations by SPF's Commercial Affairs Department revealed. The loans were then disbursed to their company.
Ong faces 58 charges. Of these, there are 44 charges of forgery for the purpose of cheating, with the total value of sales contracts and tax invoices involved amounting to US$247 million. Another nine are for conspiracy, with the total amount of credit facilities issued standing at about US$79.2 million. Five charges are for entering into an arrangement with Huang and two other individuals - Tan Sing Hwa and Carol Zong - to "facilitate the retention of (Tan's) benefits from criminal conduct".
BT understands that investigations against Tan and Zong are still ongoing. Their roles and positions are unclear for now, as the charge sheets have no further details on them.
Meanwhile, Huang faces a total of 63 charges for offences similar to Ong's.
Ong and Huang are said to have worked together to cheat CMB on several occasions. In July 2017, for instance, they allegedly engaged in a conspiracy with Tan and Zong that involved the forging of documents to deceive the bank into believing that Coastal Oil had entered into a contract to sell marine oil to Sinfeng Marine Services, a fuel oil retailer, and that the latter would repay Coastal Oil on a "credit payment term basis".
As a result of this alleged deception, CMB issued credit facilities amounting to US$9.9 million to Coastal Oil.
The alleged offenders are accused of using a similar method to cheat the other banks.
They are also accused of entering into an arrangement to deal with the benefits of their alleged criminal activities between July and November 2017.
During those months, cash totalling about US$21.5 million was allegedly transferred from Coastal Oil's bank account with CMB Singapore to other bank accounts in Hong Kong. According to the charges, these transfers were to facilitate the retention of benefits from criminal conduct.
BT reported in January last year that trouble at Coastal Oil Singapore, which filed for liquidation in December 2018, had hit at least 10 banks.
Also in early January 2019, Hong Kong-listed Cosco Shipping International had disclosed in a stock exchange filing that a number of banks demanded repayment of alleged debts owed by its wholly-owned subsidiary, Sinfeng Marine Services, to Coastal Oil.
"Based on a preliminary assessment, the management of Sinfeng is of the view that the documents in relation to almost all of the alleged debts are not genuine," Zhu Jianhui, vice-chairman and managing director of Cosco Shipping International, said then.
On Friday, Ong was offered bail of S$100,000, while Huang's bail was set at S$50,000.
Each offence of cheating or forgery for the purpose of cheating carries a jail term of up to 10 years and a fine. The two individuals may also be liable for a fine of up to S$500,000, a jail term of up to 10 years, or both, for each offence of abetting the entering of an arrangement to facilitate the benefits of criminal conduct.