Police in Singapore have launched an investigation into the city-state's giant oil trader Hin Leong Trading.
The probe comes days after Hin Leong founder Lim Oon Kuin admitted to hiding $800m in futures losses.
Lim revelations were made in an affidavit submitted to the High Court of Singapore last Friday when Hin Leong applied for court protection from creditors.
Lim instructed his financial department to keep the losses off its books, and said he would accept full responsibility if something went wrong.
He also admitted to secretly selling some of the large quantities of oil inventories the company had pledged as collateral for its loans.
A Singapore Police spokesperson told TradeWinds that investigations are ongoing, but did not elaborate further.
Lim subsequently resigned from all executive and director roles, and Hin Leong and other affiliated companies .
Hin Leong is struggling under a $4.05bn debt load, while its banking lenders have cut off credit lines and issued payment calls on existing loans.
Oil market sources say the company bet high just before the oil price collapse, buying large quantities of aviation jet fuel and marine bunkers.
The company has asked for protection from creditors for a six month period while it tries to work out a restructuring plan with its creditors.
It has also indicated that its in negotiations with a Chinese oil major that has expressed an interest investing in the company.
Lim and his family control a business empire also includes Ocean Tankers, one of Asia's largest oil transporters with a 150-strong fleet that includes 18 VLCCs.
Last Friday Ocean Tankers also filed for court protection. It said that while it was solvent and had sufficient cash reserves to continue trading, it could potentially be exposed to Hin Leong-related claims.
Much of the oil that Hin Leong secretly sold without the knowledge of the banks holding the bills of lading was stored on Ocean Tankers' VLCCs, which could leave it open to hefty claims for misdelivered cargoes.
Representatives of the Singapore-based law firm Rajah & Tann, which is acting on behalf of Hin Leong, said they could comment on any matters pertaining to the company while its case is still before the courts.
