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SINGAPORE (BLOOMBERG) – Oil magnate Lim Oon Kuin, founder of the troubled Singapore oil trader Hin Leong, has denied allegations by the company’s largest creditor that he used forged documents to obtain financing.
HSBC Holdings is suing Lim, his sons and a Hin Leong Trading employee to recover US $ 85.3 million (S $ 115 million) in financing that the bank alleges they obtained with forged deals.
OK Lim, as he is commonly known, says the documents were issued “in error” and that he was not aware of the process, and is not responsible for HSBC’s losses. His family and Hin Leong’s employee also deny the accusation, according to defense presentations to a local court earlier this month.
Hin Leong’s creditors, which also include DBS Group Holdings, are struggling to recover funds from the insolvent company in one of the biggest commodity trading scandals in decades. HSBC’s lawsuit, filed in late October, came two months after the merchant’s court-appointed managers PricewaterhouseCoopers took legal action against Lim and his family for a total of $ 3.5 billion in outstanding debt.
HSBC, Europe’s largest bank, has the largest exposure to Hin Leong, with around $ 600 million, the most among 23 banks. HSBC did not respond to a request for comment.
Both plaintiffs allege that Lim, his son Evan Lim, and his daughter Lim Huey Ching were involved in fraudulent business transactions. OK Lim, who founded Hin Leong in 1963, also faces two counts of falsifying documents for the purpose of cheating, and is under an ongoing investigation by the Singapore authorities.
In the defense presentation, OK Lim’s lawyer stated that Lim failed to carry out the day-to-day business and operational activities in Hin Leong and left them to the relevant employees and departments. Lim and his children were told on or about April 12 that the company had mistakenly made two requests to HSBC for discounted financing earlier this year. They informed the bank the same day, saying the company would attempt to repay the funds, according to the filing.
Previously, Lim said in an affidavit that he had ordered his employees to conceal losses when preparing the company’s balance sheets for bank reference.
“I had instructed the finance department to prepare the accounts without showing the losses and told them that I would be responsible if something went wrong,” Lim said in the affidavit.
Although Hin Leong Trading (Pte) Ltd’s official accounts showed a profit of $ 78 million in its fiscal 2019 year, “really,” Lim explained, the company “has not made a profit in recent years.”
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