Hin Leong's Lim family fail in bids against court-appointed managers

Singapore

THE liquidators of failed Hin Leong Trading have scored a big win in their bid to recoup mega bucks from scandal-hit tycoon Lim Oon Kuin and his children of the Hin Leong group, one of Asia's largest oil services firms.

The Singapore High Court last Friday issued an oral judgment in favour of the liquidators' application for a Mareva injunction to freeze as much as US$3.5 billion of the Lim family's assets worldwide, which include properties in Singapore and Australia, shares, insurance policies and club memberships, The Business Times understands.

Over the next few days, the liquidators' lawyers will require the Lim family to disclose their assets to the court, according to a letter to creditors by HLT's liquidator Goh Thien Phong that was seen by BT.

The Lim family may file an appeal, Mr Goh further informed creditors.

HLT's liquidators Mr Goh and Chan Kheng Tek of PricewaterhouseCoopers (PwC) are represented by senior counsel Cavinder Bull and Chia Voon Jiet of Drew & Napier. The elder Lim is represented by senior counsel Davinder Singh and Jaikanth Shankar of Davinder Singh Chambers. Earlier this month too, Lim, better known as OK Lim and once an icon in Singapore's oil community, was charged with over 20 counts of forgery-related offences.

Last December, HLT's liquidators who were then the oil trader's judicial managers, applied to freeze the family's assets, some four months after they sued the family for US$3.5 billion, alleging that they breached their fiduciary duties as directors and engaged in fraudulent trading.

The liquidators had filed the application on concerns over the risk of asset dissipation as they attempted to recover billions of dollars owing to over 20 creditors including HSBC, ABN Amro, DBS and OCBC.

The JMs were appointed as liquidators in March this year when the court granted an order to wind up the debt-hit HLT after months-long hunt for potential investors to save the group had failed.

Since then, the Lims have sold their most prized asset Universal Terminal - a commercial storage facility on Jurong Island - to Jurong Port. The sale of the 41 per cent stake in the giant oil terminal was understood to have fetched between S$400 million and S$500 million. According to reports, the family has also divested dozens of ships owned by Xihe Group, a vessel owner in the sprawling Hin Leong empire, which is under a court-supervised restructuring.

While the sale of the Universal terminal marked a big step in resolving the Lims' financial woes, it had then raised some concerns. Chief among these concerns was the extent to which, if at all, the proceeds would be used to repay the oil trader's lenders.

The liquidators bid to freeze the family's assets and block the sale of any private properties suffered a minor setback in April after the court reserved judgment on their Mareva injunction application. The latest development is therefore deemed a big step forward in their bid to recover the monies owing.

Things appear to be unravelling against the Lims' favour over at another troubled company too: Ocean Tankers, one of Asia's largest vessel operators.

Ocean Tankers' JMs Angela Ee and Purandar Rao of Ernst & Young last month won their bid in court to claim US$19 million from the Lim trio, BT understands. Following the court decision, the Lims paid out some US$20 million including post-judgment interest to the JMs. But the family filed an appeal against the judgment weeks later, according to an update by the JMs to creditors obtained by BT.

The JMs filed the claim a year ago, alleging that Ocean Tankers made two separate payments collectively worth US$19.02 million to the Lims as partial repayment of shareholder's loan when the firm was insolvent. The suit against the family was filed on the basis that the payments involved an "undue preference" and alleged breach of the trio's fiduciary duties, which required them to ensure the firm's assets were not dissipated or exploited for their own benefit at the expense of creditors.

Ocean Tankers JMs had also sought an extension of the JM order. The bid was challenged by the Lims, who were seeking instead to wind up the vessel operator. Here too, they haven't had much luck;the court recently granted an extension on the JM order till end-July this year.