HSBC Holdings is suing Hin Leong founder Lim Oon Kuin, his two children, and a manager of Hin Leong’s corporate affairs department, Serene Seng Hui Choo, in a bid to recover the US$85.3 million ($116.1 million), says The Straits Times on Nov 5.
The suit, which was filed on Oct 21 in the High Court, makes HSBC the first bank to take legal action against the Lims to recover its losses. The suit comes two months after Hin Leong’s interim judicial manager PricewaterhouseCoopers Advisory Services (PwC) filed its own lawsuit against the company.
See: Hin Leong founder OK Lim and children sued by PricewaterhouseCoopers for US$3.5 bil and Documents forged on a “massive scale” at Hin Leong to hide losses
On June 22, PwC’s Goh Thien Phong and Chan Kheng Tek, in their report, discovered that the oil trading giant overstated its assets by an “astonishing” sum of more than US$3 billion, and that it has fabricated documents on a “massive scale”.
The findings diminished the prospects for HSBC Holdings and other banks to recover losses from the beleaguered company.
Hin Leong was found to owe almost US$4 billion to 23 banks, HSBC among them.
The London-based bank also had the most exposure to the company at about US$600 million.
See also: HSBC and other banks unlikely to recoup Hin Leong loss
According to The Straits Times, HSBC can rely on findings made by the State Courts in the criminal proceedings to strengthen its case against the Lims.
The London-based bank is alleging that the defendants “fraudulently deceived” the bank into lending Hin Leong US$111.7 million by signing forged invoices that were submitted earlier this year.
One sales invoice was meant for cargo sold to China Aviation Oil (CAO) for US$56 million, the other for cargo sold to Unipec Singapore for US$55.7 million.
The fake CAO cargo sale is the subject of HSBC’s lawsuit, says The Straits Times.
The suit also alleges that OK Lim had instructed Hin Leong employees to “fabricate” a CAO inter-tank transfer certificate claiming that the company had transferred 1.05 million barrels of gasoil to CAO on March 18. But no cargo was sold or transferred by the company to CAO and no cargo inspection had been conducted.
Choo, who was in charge of Hin Leong’s finance and accounts department, allegedly told the bank that Hin Leong “foresaw some ‘issues’ with repayment from CAO and Unipec”.
The company claimed the transactions with CAO and Unipec “did not go through” and agreed to “refund” HSBC.
On the same day, the Lim family credited US$17.5 million into Hin Leong’s account with the bank.
See also:
- Singapore oil trader Hin Leong failed to declare losses of US$800 mil
- Hin Leong founder OK Lim charged with abetting forgery for cheating, given court bail of $3 mil
- The tide turns for Hin Leong
- Oil trader Hin Leong set to hand over management from founding family to PwC
- Potential reprieve for Hin Leong as Sinopec eyes oil terminal
- Hin Leong bankruptcy may cause local NPLs to rise
- Banks freeze credit to Singapore oil trader after price crash
- Standard Chartered hit by bad loans including Hin Leong
- MPA awards two new bunkering licenses to fill void left by Hin Leong
- DBS, OCBC, UOB likely to record impairments owing to Hin Leong Trading bankruptcy: Phillip Securities
- HSBC and other banks unlikely to recoup Hin Leong loss
- Winson Oil Trading takes OCBC to court, demands payment for Hin Leong deal
