Banks lost US$300m in 'fraudulent loans' to Hin Leong
Singapore
SIXTEEN banks in Singapore have suffered nearly US$300 million in "actual monetary loss" out of a total US$2.77 billion loans they were allegedly "deceived" into extending to collapsed oil trader Hin Leong Trading (HLT) by the company's founder Lim Oon Kuin.
The losses - US$291.9 million to be exact - are related to some of the 130 charges, mostly forgery-related, that have been tendered against Lim, Singapore prosecutors disclosed during last week's hearing on the case against Lim, better known as OK Lim.
He is accused of cheating both local and international banks to get financing for HLT by deceiving them into believing that the trader had entered into sales contracts with oil firm BP Singapore, some of the charge sheets read. The banks include DBS, OCBC, Australia and New Zealand Banking Group (ANZ), Sumitomo Mitsui Banking Corp, Deutsche Bank, Societe Generale and Standard Chartered Bank (Singapore).
The losses are part of a total of US$3.5 billion in outstanding debts owed by HLT, once Asia's largest oil trader, to 23 banks. The recovery of the larger sum is part of separate civil proceedings.
HSBC and ABN Amro are the banks with the biggest exposure; collectively, Singapore's banking trio DBS, OCBC and UOB are owed at least US$600 million.
Two other entities under the Hin Leong empire - Ocean Tankers and Xihe Group, giant-vessel operator and owner respectively - are also knee-deep in debt and under judicial management for debt recovery.
HLT is being wound up by its judicial-managers-turned-liquidators Chan Kheng Tek of PricewaterhouseCoopers Advisory Services (PwC) and former PwC partner Goh Thien Phong, who has since set up his own practice GTP Advisory Pac.
The court-appointed managers are also suing Lim and his children for US$3.5 billion for alleged breach of their fiduciary duties as directors and for fraud. They scored a win last month from the High Court 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 memberships at Raffles Marina and the Singapore Polo Club.
The freeze order, observers say, likely includes the proceeds from the earlier sale of the Lim family's 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.
The Hin Leong saga and the fraud allegations unfolded in the wake of last year's historic oil crash, after the pandemic-decimated demand for energy spawned multiple legal suits.
HLT, led by the current liquidators, is also suing Deloitte & Touche, alleging that the Big Four firm had failed to detect, identify and report "serious irregularities" in the trader's affairs since 2010.
As a result, HLT's audited financial statements over several years were materially misstated and did not give a true and fair view of its financial position and performance, the lawsuit filed in March alleged.
Deloitte had audited Hin Leong's books for at least 16 years when the giant trader was brought to its knees by its mountain of debt last year.
Lim shocked business circles by admitting in an affidavit that he had hidden trading losses of some US$800 million in HLT's books.
When asked to comment on the matter, a Deloitte spokesperson told The Business Times: "Deloitte cannot comment as the matter is before the court."
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