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Oil trader Winson demands payment from OCBC for Hin Leong deal
[SINGAPORE] The spectacular collapse of Singapore oil trader Hin Leong Trading has sparked another legal skirmish between one of its banks and a trading rival.
Winson Oil Trading took Oversea-Chinese Banking Corp (OCBC) to court, demanding payment for a sale of fuel to the troubled trader that was financed by the bank.
The Singapore lender says it doesn't have to pay Winson because it has "serious doubts" about Hin Leong's paperwork and cargo backing the finance deal, according to court documents.
The Winson suit comes just weeks after a Singapore court dismissed an application by Unipec Singapore for an injunction to stop Credit Agricole from paying Hin Leong for a diesel shipment.
The Chinese oil trader made similar claims of fraud against Hin Leong, which collapsed in April after its legendary founder Lim Oon Kuin admitted the company hid millions in losses and unloaded fuel pledged for loans. Some 23 banks, including OCBC, are owed almost US$4 billion by the trader.
In a June 1 statement filed to the High Court of Singapore, Winson said OCBC - Singapore's second largest bank by assets and market cap - failed to pay US$30.4 million from a letter of credit it issued to finance a diesel trade for Hin Leong. The breach of the payment has caused loss and damage to Winson, it claims.
OCBC spokesperson Koh Ching Ching declined to comment. Winson and Hin Leong didn't respond to email inquiries seeking comment.
The letter of credit for Hin Leong was issued by OCBC in favour of Winson on April 6 and was irrevocable, Winson said in the court document. OCBC missed the payment deadline of May 18, and the letter of credit was to expire June 2, it said.
On April 23, OCBC sent an email to Winson saying the bank wouldn't be honouring the letter of credit.
"There are serious doubts over the authenticity of the documents presented to us, and/or the transaction contemplated therein, and/or the existence of the cargo that is to be pledged to the bank," OCBC was quoted as saying in Winson's statement.
In the message, OCBC said Hin Leong admitted to executing "fraudulent paper transactions" for the deal.
Established in 1998, Winson is a regional energy company whose businesses span from oil trading to bunkering to supply chain services, with offices and projects in Hong Kong, Singapore, Taiwan and mainland China, according to its website. The company said in April that it doesn't have any open account receivables with Hin Leong.
The case is scheduled for a pre-trial conference on July 8, according to the court documents.
OCBC shares were up S$0.03 or 0.3 per cent to S$9.33 as at 11.37am on Friday.