OK Lim grilled by prosecutors over role at Hin Leong, knowledge of company operations
LIM Oon Kuin, founder of failed oil trader Hin Leong, and prosecutors on Friday (Nov 3) locked horns over his role in the company.
The accused, better known as OK Lim, also had an exchange with Deputy Public Prosecutor (DPP) Christopher Ong on the former oil tycoon’s understanding of terms such as margin calls and invoice discounting.
DPP Ong said Lim had testified in court that he was the first managing director of Hin Leong when the company was incorporated in 1973, and remained in that position for 47 years until the group ran into trouble in 2020.
When asked by DPP Ong why he was selected to be the first managing director, Lim said it was because he ran the operations.
Lim, who spoke in Mandarin, told the court through an interpreter: “That is why it was most appropriate for me to take this role and to manage (the company).”
DPP Ong asked Lim if it was fair to say that he was the “driving force” behind the founding of Hin Leong as an incorporated entity and its subsequent growth. Lim agreed.
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As managing director, Lim said, he was responsible for things such as sales, client liaison, purchasing of oil, liaising with oil companies and suppliers, and ensuring the delivery and fulfilment of orders.
In response to queries from DPP Ong, Lim said he was also the driving force behind Ocean Tankers, a shipping firm linked to Hin Leong, as well as Universal Group Holdings.
DPP Ong asked Lim if he had still been involved in trades after relinquishing his position as managing director in 2020. DPP Ong also asked Lim to name the other customers of Hin Leong whose trades he was handling personally in 2018 and 2019, near the time he stepped down.
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Lim cited ExxonMobil, Zhonghua Singapore, Sinopec Singapore and PetroChina as customers that he would personally negotiate deals with even as he was close to stepping down.
DPP Ong then asked if Lim had handled Hin Leong’s trades with two companies – Yuantai Fuel Trading and Daxin Marine – in 2018 and 2019. Lim said he was involved only in the deals of oil that was going to certain places.
Among other things, DPP Ong then pressed Lim on certain terms that were used or certain instruments that surfaced when Hin Leong ran into trouble and racked up significant amounts of debt, as well as his understanding of these terms at the time when he was Hin Leong’s managing director.
Hin Leong lender HSBC has alleged that the oil trader was facing margin calls and bank repayment deadlines and did not have the funds to make the payments.
Lim was asked if he knew what a margin call was, to which he replied that he had become “familiar” with the term after he had “heard it so much in court”.
When asked if he fully understood what a margin call and its mechanics entailed, Lim said: “Because I was not involved in this thing, I do not know (about) margin calls.” In response to DPP Ong’s question on whether he understood the definition of a margin call back in 2020, Lim said he did not quite understand what a margin call meant then.
As for letters of credit (LCs), Lim said he knew that when Hin Leong bought oil from other parties, the company needed to issue an LC to them. However, he said he did not know what a trust receipt was used for in oil trading, and that he was also unclear about what the discounting of invoices was.
An LC is a letter from a bank guaranteeing that a seller will be paid once goods are shipped and the terms of the LC are met. A trust receipt is a notice of the release of merchandise to a buyer from a bank, but the bank retains ownership title until the facility has been paid off.
In his cross-examination, DPP Ong attempted to clarify certain points that had arisen during the examination-in-chief that was carried out by the defence counsel, lawyers from Davinder Singh Chambers, from Oct 30 to Nov 2.
Among other things, DPP Ong asked Lim if he had given Katherine Ong – a former accounts executive at Hin Leong – instructions to tell the company’s traders to conduct more deals in an attempt to improve the company’s cashflows in the event that the group had a poor cashflow position.
Lim said Katherine Ong knew what to do, and there was “no need” for him to tell her what to do. Lim said she would liaise with the traders on her own in the event the company’s cashflow needed a boost.
“I put it to you what you meant by your examination-in-chief... is that when Katherine Ong came to you to tell you that the cashflow situation was low, you would instruct her to go to the traders to do more deals to address the low cashflow,” DPP Ong said.
Lim said this was incorrect, and that he disagreed.
DPP Ong suggested that Lim was “now trying to change (his) evidence” to “distance (himself) from the fact that (he) would change the deals to address Hin Leong’s cashflow situation”.
Lim disagreed with this point.
DPP Ong also asked Lim to clarify details regarding a call that had purportedly taken place between certain Hin Leong employees and HSBC regarding an incorrect discounting application.
Prosecutors had said in their opening statements for the case that HSBC disbursed about US$111.7 million in March 2020 to Hin Leong as payment for two oil sales to Unipec Singapore and China Aviation Oil. Prosecutors said these two transactions were fraudulent.
Lim had said during the examination-in-chief that he, along with his two children – Lim Huey Ching and Lim Chee Meng – and former long-serving employee Serene Seng, were on a call with HSBC.
Responding to queries from DPP Ong, Lim said the call was conducted through a landline phone, and it was either one of his children that was speaking to HSBC. Lim said he could not remember which of his two children spoke on the call.
DPP Ong asked if Lim could hear what the HSBC representatives were saying on the call, to which Lim replied that he could hear, although it was “very soft”.
As the HSBC representatives were purportedly speaking in English, DPP Ong asked if Lim could understand what was being said. Lim said after his children had spoken on the line, they would pause to fill him in on what had been said.
DPP Ong asked: “In other words, your knowledge of the call is based on what Huey Ching or Chee Meng told you about what had been said, correct?”
Lim agreed. DPP Ong also asked how Lim could then be sure that HSBC did not sound its intention to serve notices against Hin Leong.
“Whatever was discussed, it was immediately communicated and then responded (to),” Lim replied. “If this was mentioned, my children would have definitely told me.”
Lim’s counsel have said they will be calling on another witness to take the stand – Yeo Seem Huat, a doctor that Lim had seen.
Lim faces about 130 forgery and cheating charges, three of which have proceeded to trial. Two of the three charges relate to cheating, while the other relates to forgery. Prosecutors on Jul 19 closed their case against Lim after a trial spanning 14 weeks in which 17 witnesses took the stand.
The prosecutors’ cross-examination of Lim resumes on Nov 20, with Judge Toh Han Li presiding over the case.
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