Lim Oon Kuin, the Singapore tycoon whose giant oil trading and tanker empire collapsed in 2020, pleaded not guilty as the first three of the more than 120 fraud charges he faces went to trial on Tuesday.
Wheelchair-bound, and appearing very frail, the 81-year-old founder of Hin Leong Trading, Xihe Group and affiliated Ocean Tankers, was unable to stand as prosecutors brought forward two charges of cheating HSBC Bank out of $111.7m and one count of instigating a Hin Leong Trading employee to forge a false record.
Lim faces a possible 10-year jail term if found guilty of the charges he is currently on trial for.
According to the prosecution, Lim defrauded HSBC through his employees by making it appear as though Hin Leong had signed two oil sales contracts with China Aviation Oil (Singapore) Corporation and Unipec Singapore.
Two invoice financing applications were made based on those alleged transactions, however, they were total fabrications, generated on the accused’s direction, lead prosecutor Christopher Ong said.
The alleged deception led to HSBC paying Hin Leong $111.7m as part of a Silent Confirmation and Discounting Agreement, a financing facility that saw Hin Leong, as the seller in the transactions, sell the unpaid invoices to HSBC for a discounted upfront payment, leaving the bank to recoup payment from the buyers at a later date when the invoices became due.
According to HSBC, it sent letters seeking payment of the amounts owed under the invoices to China Aviation Oil and Unipec on 20 April 2020. However, both companies denied engaging in those purported transactions with Hin Leong.
On 12 April 2020, five days before Hin Leong filed for bankruptcy, Lim and his two children, Lim Huey Ching and Lim Chee Meng, informed HSBC representatives that due to “miscommunication” within Hin Leong, the discounting applications for the sales to China Aviation Oil and Unipec had been submitted to the bank in error, despite the fact that these deals had not been completed.
Hin Leong collapsed when banks withdrew their financing after Lim admitted the company had lost large sums of money in the FFA markets. Affiliated tanker operator Ocean Tankers and tanker-owning company Xihe went into liquidation shortly thereafter.
Through Ocean Tankers and Xihe, Lim controlled a fleet of in excess of 115 tankers, with vessels in almost all tanker subgroups. Xihe’s liquidator conducted a staggered mass sell-off of this vast fleet over a period stretching more than two years.
