OK Lim told CAD officer: ‘We did not plan to cheat banks for financing’

LIM Oon Kuin, founder of Hin Leong Trading (HLT), told a police officer who was investigating allegations against him following a police report lodged by HSBC that the company did not plan to cheat the banks for financing.

“We did not plan to cheat banks for financing. It is common for oil companies to submit sales contracts to the banks for financing based on verbal confirmations. This is to get faster cash flow,” the fallen oil tycoon had said during an interview on Jul 17, 2020, with Sim Wan Lin, an officer attached to the Commercial Affairs Department (CAD)‘s private institutional fraud division.

Sim was reading out Lim’s statement from that interview at the State Court on Tuesday (Jun 13) during an examination-in-chief by deputy public prosecutor Christopher Ong. Sim, who was at that time a senior investigating officer at the CAD, is the prosecution’s tenth witness in the trial that began on Apr 11.

“We were already in verbal discussions with Unipec (Singapore) and CAO (China Aviation Oil)... so I asked them (Hin Leong employees) to draft the contract(s). Both Unipec and CAO agreed. At that time, Hin Leong (was) facing margin calls, so I asked them to send (the contracts) to the treasury department,” Lim had said during the interview, which lasted 45 minutes.

This had been in response to Sim’s question on whether he had asked HLT staff to submit forged sales contracts in March 2020 to another employee from the company’s treasury department. The contracts were purportedly for the sale of oil to CAO and Unipec.

Singapore prosecutors have alleged that the two transactions are “complete fabrications”. They have claimed that Lim instructed HLT employees to make the discounting applications to HSBC through forged and fabricated supporting documents, and that as a result, the bank was “dishonestly induced” into disbursing some US$112 million to HLT.

Sim read out two statements that were taken from Lim during interviews in July 2020 and August 2020. She noted on both occasions that Lim appeared “breathless”. The 81-year-old former oil tycoon of the collapsed Hin Leong empire had not been in a wheelchair for those interviews, but Sim said he needed to be assisted by his wife as he had difficulty walking. Lim has been in a wheelchair throughout the court hearing.

Lim had informed Sim that he was “feeling very unwell” and “very forgetful nowadays”. He had also told her that when he was nervous, he would feel a “pulling sensation” in his “intestines”.

According to the statement read out by Sim, Lim had remarked that because the company was placed under interim judicial management (IJM) led by PwC and law firm Rajah & Tann, there was “immense stress” on the company and some 1,000 people stood to lose their jobs.

“In terms of Hin Leong matters, the initial lawyer is Rajah & Tann. They have acted for my family for many years... They have chosen to help in the IJM instead. Initially our plan was to restructure the company, but it became an IJM instead,” he had said.

“It is a mistake to go with IJM,” he had said in the second statement taken in August 2020, as read out by Sim in court.

During that interview, Sim had showed Lim an inter-tank transfer (ITT) certificate issued by Universal Terminal, indicating delivery of oil that HLT had sold to CAO. Universal Terminal, a commercial storage facility on Jurong Island, was then 41 per cent owned by the Lim family. In 2021, amid all the troubles at the Hin Leong group, it was acquired by Jurong Port.

When asked by Sim if this transaction had taken place, Lim had replied: “I do not know. There are many things happening in Hin Leong every day... it is impossible to know everything.”

Prosecutors have claimed that the ITT certificate, along with the sales contract and invoices submitted in support of the discounting application to HSBC in relation to the CAO transaction – and similarly, for the Unipec transaction – had been forged or fabricated by Hin Leong employees on Lim’s instructions.

In response to Sim’s question on whether the ITT certificate could have been prepared by HLT employees, Lim had said he could not recall if he instructed his employees to prepare the documents.

He had further said: “Whatever the employees do, it is for the benefit of the company. My employees are good people. I treat them (well)... young and old... even the cleaning aunties...

“What happened to Hin Leong is because of oil prices... (the) market (is) not good because of Covid... I bear the responsibility as I am the big boss... I make the final decision.”

The hearing before Judge Toh Han Li continues, and takes place over several dates till Jul 20.