Photo: Bloomberg
Lim Oon Kuin, the founder of collapsed Singapore oil trader Hin Leong Trading (Pte.) Ltd, is appealing a court order to return funds the family took out of a unit just before it filed for protection last year.
The appeal was made this month after the Lims paid the sum to Ocean Tankers Pte. Ltd. according to letters to the firm’s creditors seen by Bloomberg News. The amount covers US$19 million ($25.3 million) transferred from the shipping company on two separate occasions last year to the Lims’ bank accounts, as well as interest and costs, totalling US$20.1 million.
Ocean Tankers is currently under the control of judicial managers from Ernst & Young LLC and is a sister company of Hin Leong, which owes about US$3.5 billion to global banks including HSBC Holdings Plc.
The payment underscores another setback for Lim, who founded Singapore’s largest independent oil trading firm and related shipping operators but fell on his own sword last year partly due to bets on oil prices that went awry. Ocean Tankers, one of his companies, has potential liabilities of as much as US$2.67 billion linked to Hin Leong, according to an affidavit of Evan Lim, the son of Lim, who had run the shipping firm.
Singapore’s High Court approved a request last week to freeze as much as US$3.5 billion of assets worldwide belonging to the Lim family.
The fallout of Hin Leong last year reverberated across global markets, prompting financial institutions to reassess their exposure and shaking out large tracts of the often-opaque US$4 trillion oil-trading industry. Bank creditors including HSBC Holdings Plc and DBS Group Holdings Ltd., have been struggling to recoup their debts from the company.
Ocean Tankers’ transfers
The Lim family made two transfers amounting to US$19 million on April 3 and 13 last year out of Ocean Tankers to their own bank accounts, according to a letter dated May 3 from the EY judicial managers, who demanded the family pay back the sum plus an interest rate of 5.33% per annum and other costs.
Ocean Tankers applied for court protection from its creditors on April 17 of the same year and was subsequently placed under judicial management the following month. The family returned this sum following a court order in April this year.
Angela Ee, a judicial manager at EY, declined to comment. Representatives from Davinder Singh Chambers LLC, acting for the trader known as OK Lim and his two children, did not immediately reply to an email seeking comments.
