Singapore Probes Energy Trader Hin Leong
April 21 2020 - 12:03PM
Dow Jones News
By Chong Koh Ping
Singapore police said Tuesday they are investigating a major
energy trading firm, after revelations that it may have suffered
hidden futures losses of about $800 million over several years.
Last Friday, closely held Hin Leong Trading Pte. Ltd. and an
affiliated shipping company, Ocean Tankers Pte. Ltd., filed for
protection against creditors for 30 days at the Singapore High
Court, according to an executive at one of its creditors.
That filing said Hin Leong Trading owed $3.85 billion to 23
banks, the executive said, including about $600 million to HSBC
Holdings PLC, and a total of around $600 million to three Singapore
banks, DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and
United Overseas Bank Ltd. The Journal hasn't been able to obtain
the filings.
The filings said it was seeking to extend its debt repayments
after suffering from the effects of the coronavirus pandemic and
the oil-price collapse, this person said.
Rajah & Tann, the law firm advising Hin Leong on its
restructuring, declined to comment. Hin Leong didn't immediately
respond to an email seeking comment.
"The Police confirmed that investigations are ongoing," a
Singapore Police Force spokesman said in an email Tuesday, without
elaborating.
Hin Leong's founder, Lim Oon Kuin, said in a court filing the
company had been loss-making for the past few years and had
suffered about $800 million in futures losses that weren't
reflected in its financial statements, according to an excerpt
viewed by The Wall Street Journal.
"I had given instructions to the finance department to prepare
the accounts without showing the losses and told them that I would
be responsible if anything went wrong," said the filing from Mr.
Lim, who is often known as O.K. Lim.
Before the troubles emerged, Forbes had estimated Mr. Lim to be
the 18th richest person in Singapore, with a net worth of $1.3
billion.
The corporate drama is unfolding alongside extraordinary
turbulence in global commodity markets, with U.S. oil prices
plunging below zero for the first time this week.
It also follows other problems in Singapore's sizable
commodity-trading industry that have emerged in recent years. These
include the 2018 restructuring of Singapore-listed trading house
Noble Group Ltd. and a $320 million rogue-trading loss last year at
a Singapore unit of Japan's Mitsubishi Corp.
A group of banks has hired Drew & Napier LLC, a local law
firm, to seek a court-appointed independent administrator to manage
the business and assets of Hin Leong, a person familiar with the
matter said.
Mr. Lim set up Hin Leong in 1963. He migrated to Singapore from
a small town in southern Fujian province in China, starting with a
one-man operation driving a single truck that delivered diesel to
small fishing boats.
The company's shipping arm, Ocean Tankers, owns and operates
more than 130 vessels. Its bunkering arm was the third largest
shipping-fuel supplier in the city-state last year, according to
the Maritime and Port Authority.
Costas Paris and Quentin Webb contributed to this article.
Write to Chong Koh Ping at chong.kohping@wsj.com
(END) Dow Jones Newswires
April 21, 2020 11:48 ET (15:48 GMT)
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