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SINGAPORE – The High Court has given the green light to the liquidation of Hin Leong Trading, marking the end of the road for the collapsed oil trading giant after nearly a year of restructuring.
In a hearing on Monday morning (March 8) before Superior Court Judge Kannan Ramesh, Receivers Goh Thien Phong and Chan Kheng Tek of PricewaterhouseCoopers (PwC) Advisory Services were appointed liquidators of Hin Leong.
They had requested the liquidation of Hin Leong after three potential bidders withdrew from a deal to buy Hin Leong and two related companies as a combined entity.
The sale of Hin Leong, its shipping division Ocean Tankers and Xihe Holdings, owned by the Lim family, as a combined entity, would have helped recover more than the company’s US $ 257 million (S $ 347 million) in estimated assets. , according to Bloomberg. The liquidation of a business usually results in a liquidation sale of its assets, which raises less money than a formal bidding process.
Once one of Asia’s top oil traders, Hin Leong collapsed last year after falling oil prices triggered a default that exposed years of hidden losses and alleged fraud by its founder Lim Oon Kuin, better known as OK Lim, as well as his son Evan Lim. Chee Meng and his daughter Lim Huey Ching.
PwC filed a lawsuit last August to force Lim and his two sons to pay off $ 3.5 billion in debt and $ 90 million in dividends that they allegedly paid themselves despite the fact that their company was insolvent. PwC alleged that they violated their fiduciary duties as directors and engaged in fraudulent operations.
The alleged fraudulent activity included “creating fictitious profits to conceal accumulated trade and other losses, falsifying documents, tampering with Hin Leong’s accounts through irregular accounting entries, exaggerating Hin Leong’s inventory, and obtaining of financing by improper means, “according to the lawsuit.
HSBC, Hin Leong’s biggest creditor with around $ 600 million owed, also took legal action against the family, followed by the Bank of China. According to estimates presented in court documents last year, DBS, ABN Amro Bank and OCBC Bank are owed between $ 200 million and $ 300 million each.
During Monday’s hearing, the Lim family objected to the receivers being appointed liquidators, citing a conflict of interest that they could not objectively review the receivers’ fees.
Instead, the family proposed Mr. Henry Tan and Mr. Chan Yee Hong of Nexia TS as liquidators of the company.
[[nid:503353]]But the JM’s lawyers argued that there is no conflict of interest, as the fees will be reviewed by the court and creditors.
The liquidators will continue the lawsuit against the Lim family, collect accounts receivable from counterparties and dispose of Hin Leong’s remaining assets, including an industrial building on Playfair Road, as understood by ST.
Another problem still to be solved is the substantial amount of oil cargo that is still stored in tanks at Universal Terminal. These are under a court order obtained by a creditor, as understood by ST. The Lim family managed and owned 41% of Universal Terminal through Universal Group Holdings.
Hin Leong has between 10 and 15 workers left, who are still needed to help with the liquidation process, ST understands.
This article was first published in The times of the strait. Permission is required for reproduction.
