OK Lim takes stand, says family oil trading business had ‘left pocket, right pocket’ model
LIM Oon Kuin, founder of oil trader Hin Leong Trading, described his group of businesses as a “family business” with significant interdependencies, in a court hearing on Monday (Oct 30).
Speaking in Mandarin, Lim – who is better known as OK Lim – said that the companies in his empire – including Hin Leong, Ocean Tankers, Ocean Bunkers, Xihe Holdings and Xihe Capital – operated on a “left pocket, right pocket” model.
“Sometimes, if one company needs anything, the other will help. If one company needs funds, another company will send the funds over,” Lim said, as he took the stand in a district court for the first time to testify in his own defence.
Lim, who is facing cheating and forgery charges, is represented by lawyers of Davinder Singh Chambers. He was responding to questions on Monday posed by one of the firm’s lawyers Navin Thevar. Judge Toh Han Li was presiding over the case.
Thevar had asked Lim for details of each company that fell under Lim’s control. In response, Lim said Hin Leong was in the business of buying and selling oil. The company had then set up other businesses.
Shipping arm Ocean Tankers was set up to manage and rent out ships, while Ocean Bunkers was set up to supply bunker to the ships. Ocean Bunkers was managed by Ocean Tankers, Lim said.
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Xihe Holdings and Xihe Capital were holding companies that owned over 100 tankers, while Universal Group Holdings was the largest oil storage terminal in Singapore, and was used to store different types of oil.
Lim became the managing director of Hin Leong in 1973, and relinquished this position in either March or April 2020.
“When something happened at Hin Leong, I resigned. I resigned as a director from all the companies,” Lim said, adding that Hin Leong’s other directors when he resigned were his children.
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Among other things, Thevar questioned Lim on his ability to use a computer and fill in forms that were in English.
Lim said he does not know how to turn on or turn off a computer, and does not know how to use e-mails. He does not know how to print or photocopy documents, or fill in a majority of forms that are English-based.
Lim said he would be able to fill in a few details on a form at a clinic – such as his name, identity card number, age and date – and would leave the rest to the clinic staff to fill in.
Hin Leong’s early days
Thevar asked Lim what he had done after he stopped schooling three months after he started Secondary 3.
Lim said he was unable to continue schooling as his father’s income from his job as a fisherman was unable to cover the school fees of all his seven children.
Lim said he worked “odd jobs” such as making deliveries and had a stint as an apprentice at a car mechanic where he learnt to repair cars.
He also followed his father to be a fisherman for about four years, the court heard. The duo would make two trips to Cambodia and Sarawak each month.
After a storm at sea nearly caused the family’s fishing boat to sink, Lim said his father told him and his siblings to “go look for other jobs”.
Lim then worked with the oil supplier who supplied oil for the family’s shipping boat for about two to three years, before venturing on to work with other oil vendors and suppliers.
Lim’s parents and family members then set up a small company called Hin Leong Trading to supply oil to power generators, fishing ports, delivery firms and factories.
“We worked hard; we worked day and night to supply oil to them. Because of our good service, they referred other clients to buy oil from us,” Lim said. “Our business grew and became better.”
A hands-off managing director
The court heard that from 2010 till the time he stepped down as Hin Leong’s managing director, Lim engaged mainly in “strategic work” and “new business development”.
“When it comes to negotiating business, I rarely take part (in discussions),” Lim said.
In response to a question from Thevar on who handled Hin Leong’s day-to-day and commercial activities, Lim said the company had different teams and departments that took care of such activities.
Lim then gave an example of the flow of events that takes place when a trader closes a deal. The contracts department would get the relevant information to prepare the contract, and then send it to other departments such as the accounts department or operations department.
Thevar asked Lim if he was involved in these activities, and if he played a part in instructing or supervising Hin Leong employees who carried out these activities.
“I am not involved in the details, I only know from a long time ago that this is the procedure,” said Lim. “If there are some very important matters, the department heads will tell me.”
Thevar then queried Lim on four types of banking instruments that had surfaced over the course of the trial. These were letters of credit, trust receipts, discounting of invoices and mark to market margin calls.
Lim said he believed all four instruments were handled by Hin Leong’s accounts team.
He added that, from 2010 to the time he stepped down as managing director, he rarely interacted with employees from Hin Leong’s accounting team.
“Personally, I don’t know much about accounts,” Lim said. He also said it was the first time he heard the term trust receipts.
Singapore prosecutors led by deputy public prosecutor Christopher Ong in July closed their case against OK Lim after 14 weeks. Lim has been slapped with 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.
Separately, the court-appointed liquidators of Hin Leong, as well as the company’s top creditor HSBC are seeking US$3.5 billion from Lim and his children in a civil suit that commenced in August. The civil trial is ongoing at the High Court of Singapore, with Justice Philip Jeyaretnam presiding over the cases.
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