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(Bloomberg) – Efforts by banks like HSBC Holdings Plc and ABN Amro Bank NV to recover $ 3.5 billion from a collapsed oil trader in Singapore have been stymied by attempts by a court-appointed administrator to tap into other assets of the family that ran the firm.
PricewaterhouseCoopers, receivers of Hin Leong (Pte) Ltd., has urged the family to repay creditors for 95% of their assets, which are estimated to be worth at least S $ 2 billion (US $ 1.5 billion), according to people familiar with the matter. The family could keep the remaining 5%, said the people, who asked not to be identified because the information is confidential. The Lim family have not accepted the proposal, hampering talks, the people said.
The impasse indicates that banks, which also include Singapore’s DBS Group Holdings Ltd., may face a long battle to recover money from the insolvent company. Hin Leong executives reportedly hid some $ 800 million in losses for years and sold millions of barrels of oil that were collateral for bank loans, according to court documents. Lim Oon Kuin, the patriarch who founded Hin Leong, has been charged with complicity in forgery for the purpose of cheating, with a sentence of up to 10 years in prison.
Representatives for PwC and the Lim family did not immediately respond to requests for comment.
PricewaterhouseCoopers sued Lim and his two sons to recover the $ 3.5 billion, including $ 90 million in dividends that the Lims allegedly paid themselves despite the company’s insolvency, according to a court file. The lawsuit first led their sons Evan Lim and Lim Huey Ching to fraud charges, saying they too were “personally liable” for the responsibilities. Hin Leong has been insolvent since 2012, PwC claims in the court filing. The Straits Times reported on the lawsuit on Monday.
Most of Lims’ other business assets include Xihe Holdings Pte. And Terminal Universal Pte. Xihe owns a fleet of vessels. The family owns a 41% stake in Universal Terminal, a major oil storage hub in Singapore, with the remainder held by PetroChina Co. Ltd. and Macquarie Asia Infrastructure Fund, according to a court document dated April 17.
The Lim family also own some heritage properties in Singapore known locally as “Good Class Bungalows”, black and white painted mansions that were typical of the colonial era. Creditors had suggested that the family put these houses and other personal assets into the common fund to help raise money for debt repayment, one of the people said.
HSBC, Europe’s largest bank, has the largest exposure to Hin Leong at around $ 600 million. DBS and ABN are on the hook for more than $ 250 million, according to April court documents.
Hin Leong’s court managers are represented by Drew & Napier LLC for the lawsuit against the Lims, according to court records. Davinder Singh Chambers LLC performs for the Lim family.
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