Singapore prosecutors close case against OK Lim

AFTER a grinding trial over 14 weeks involving 17 witnesses, Singapore prosecutors closed their case on Wednesday (Jul 19), in the widely-followed criminal trial involving cheating and forgery charges against the city-state’s fallen oil legend Lim Oon Kuin.

Next on Aug 2, the defence, led by Senior Counsel Davinder Singh of Davinder Singh Chambers, will indicate whether or not to submit a “no case to answer”.

Wednesday marks Day 47 of the hearing before Judge Toh Han Li that began on Apr 11. Singapore prosecutors, led chiefly by deputy public prosecutor Christopher Ong, have called 17 witnesses including key employees of Hin Leong Trading (HLT) who worked closely with Lim, and representatives from HSBC (HLT’s largest creditor).

The other witnesses included executives from “purported counterparties” China Aviation Oil (CAO) and Unipec Singapore, as well as the investigation officer attached to the Commercial Affairs Department (CAD).

It was disclosed in the course of Wednesday’s hearing that the prosecution had originally intended to call Lim’s children Evan Lim Chee Meng and Lim Huey Ching, who were HLT’s key directors and management figures until April 2020, but had decided not to.

All in all, some 130 forgery and cheating charges have been slapped on Lim, of which three charges – two related to cheating and the other, forgery – have proceeded to trial.

During their testimony, the former employees of the group’s flagship company HLT described Lim, better known as OK Lim, as “Chinese towkay” and “domineering”, as well as “nice” and “big boss”, who mostly conversed in Mandarin and Hokkien.

Prosecutors have accused Lim of cheating HSBC by representing to the bank, through HLT’s employees, that the company had entered into two contracts for the sale of oil with CAO and Unipec Singapore that were “complete fabrications, concocted on the accused’s directions”.

They claimed that Lim instructed HLT’s employees to make fraudulent “discounting applications” to HSBC, based on bogus invoices and forged documents in relation to these purported transactions, and as a result, the bank was “dishonestly induced” into disbursing some US$111.68 million to HLT.

One of the prosecution’s key witnesses, who was also recalled on Wednesday, is Serene Seng, 61, the trading firm’s former manager of corporate affairs who also headed the contract department. Seng had worked closely with Lim “almost on a daily basis” for more than two decades.

Seng testified that in relation to the Unipec Singapore discounting request, Lim had called her into his office one day and informed her that he was about to close a deal with Unipec, but he wanted to discount the receivables first. She had referred to it as “not a genuine deal”, and recounted that she was “honestly very scared” for herself and her children, after taking instructions to create false documents for the deal.

When pressed by Singh during the cross-examination on the inconsistencies in her court testimony that took place over four days, and her earlier statements to the CAD in 2020, Seng admitted that she had lied to the CAD on some instances.

Another witness, Peter Li Yue, deputy general manager of Unipec Singapore, who dealt regularly with Lim for trades involving gas oil and diesel products, testified that the “deal never existed... there was no such discussion regarding this contract”. He was referring to the purported US$55.8 million contract for the sale of ultra-low sulphur diesel by HLT to Unipec that was apparently concluded in March 2020.

During his cross-examination of the prosecution’s witnesses, Singh suggested that Lim was not involved in the “nitty-gritty” and operational matters at HLT. Singh also sought to establish that Lim was not involved in matters related to the discounting applications on these transactions.

It was heard in court that during an interview with the police three years ago, Lim told the investigating officer that the company did not plan to cheat the banks for financing, and that it was “common for oil companies to submit sales contracts to the banks for financing based on verbal confirmations” to meet urgent cash flow needs.

On whether the transactions had taken place, he replied to the police officer: “I do not know. There are many things happening in Hin Leong every day... it is impossible to know everything.”

Throughout the course of the trial so far, the 81-year-old, clad in a jacket and Nike slides, has been accompanied by at least two of his staff, one of whom has dutifully pushed him on his wheelchair for every session at the State Court. Lim, who studied up to Secondary 2, followed the hearing with the assistance of the court’s Mandarin interpreter.

Lim stepped down as director of HLT three years ago as financial woes mounted for the debt-heavy group, and amid admissions in court documents that he had directed HLT to hide some US$800 million in losses from futures trading. The scandal rocked Singapore’s oil sector – a key global hub – which was already rattled by an unprecedented oil slump, as the pandemic decimated energy demand.

With a US$4 billion debt pile owed to more than 20 banks, the Lims’ hope for HLT and a sister company Ocean Tankers – one of Asia’s largest fleet operators – was to seek a debt moratorium. The Lims failed in their bid, and the firms were placed under judicial managers and eventually wound up.

According to a notice issued last week, HLT was set to pay “first and final preferential dividend to preferential creditors” on Jul 14. The Business Times understands that the payments are to HLT employees.

Under the Insolvency, Restructuring and Dissolution Act, employees rank high on the list after liquidation expenses as preferential creditors in a liquidation event. It could not be ascertained how many employees of HLT received payments and how much was paid out.