THE former personal assistant of Singapore former oil tycoon Lim Oon Kuin, also known as OK Lim, who faces cheating and forgery charges, recounted she was “honestly very scared” for herself and her children because she had taken instructions to create false documents for a deal that had not taken place.

Serene Seng, 61, who had worked at Hin Leong Trading for close to 30 years and whose last position was manager of corporate affairs, broke down in court as she testified against her former boss on Monday (Apr 24).

According to the prosecution, Lim, through his employees, had cheated HSBC by claiming that Hin Leong had entered into two contracts to sell oil to China Aviation Oil (Singapore) or CAO, and Unipec Singapore, and submitting two invoice financing applications premised on those transactions.

In fact, the two transactions were fabrications concocted on Lim’s directions, and the invoice financing applications were supported by forged or fabricated documentation.

As a result, HSBC was dishonestly induced into disbursing US$111.6 million to Hin Leong, the prosecutors said.

On day seven of Lim’s trial, Seng testified she had given instructions to other Hin Leong staff to create fake documents relating to a transaction with Unipec Singapore.

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On Apr 20, she testified that in relation to the Unipec discounting request, Lim had told her he was about to close a deal with Unipec, but he wanted to discount the receivables first.

When asked to recall the words used by Lim, her answer in Mandarin translates as “we can use the invoice and send it to the bank and collect the money from the bank first”.

Seng had also testified how she used another signature of hers to sign on the bill of lading that was submitted as a supporting document for the Unipec discounting request.

The purpose of these fake documents was to “discount the receivables” even though the shipment had not been delivered at the time the documents were made, she told the court on Monday during an examination-in-chief by deputy chief prosecutor Christopher Ong.

Discounting refers to accounts receivable financing, where a seller “sells” unpaid invoices to a financial institution and typically receives a slightly discounted upfront payment. This means that the seller would receive payment from the buyer only at a later date.

If the discounting application was approved, HSBC would pay Hin Leong the invoice amount and charge a fee for the transaction.

But Lim’s defence counsel cast doubts on the prosecution’s third witness’ recollection of what Lim had said to her around Mar 19, in relation to the Unipec transaction and discounting request.

Senior Counsel Davinder Singh of Davinder Singh Chambers, who is representing Lim, said in his cross-examination of Seng’s testimony: “You’ve already agreed that you remember broadly what Lim said. Your recollection is based on what Lim broadly said, and your own belief of what his own intentions and objectives were. Correct?”

Seng replied: “I don’t agree because it was so clear to me Lim’s instruction to discount the Unipec receivables earlier when the shipment has not occurred.”

On the creation of the fake documents, Singh asked: “Your evidence is at the time you signed all of this and gave instructions, you believed that what you were doing was wrong?

“You believed it was wrong because false documents were being created with your knowledge and at your direction?”

She replied: “I believe it was wrong because the deal had not been closed yet. But it was my honest belief that Lim was going to close an actual deal.”

Seng is also one of the defendants, along with three members of the Lim family, in a civil lawsuit over US$85.3 million in damages brought by HSBC in relation to the Unipec and CAO discounting requests.

The suit alleges that the defendants had fraudulently deceived HSBC into discounting two invoices, one of which is the Unipec invoice. HSBC alleged that Seng is liable for the amounts they discounted for the Unipec invoice, among other things.

Singh asked: “If your defence was based on the fact that you were not the decision-maker and only took instructions, then your defence would have been, yes, all these things happened. False documents were created, false representations were made, but I am not responsible because I was not the decision-maker and was just taking instructions?”

Seng replied as she broke down and cried: “Yes, when all this first happened, I was honestly very scared not only for myself and also my children, so I tried not say anything incriminating at that point.”

When asked by the court and Singh to explain what she meant, she said: “I was scared for my children because they were still young and still schooling. I was scared that because I took instructions to discount documents... I was afraid to go to jail because my children were still young and in school.”

Singh asked: “Are you not scared today, having told court today that you may be prosecuted and may go to jail?

Seng replied: “I am scared, but after I sought legal advice that it is for my own good that I come clean... I know it sounds cliched, but the Lord has found me, and I have been going to church, and I just want to do the right thing... I hope the court will be merciful when the time comes to charge me or not.”

Singh said: “So you are aware there is a possibility you may be charged.”

The hearing continues. THE STRAITS TIMES