10-8-2023 (SINGAPORE) In a significant legal development, liquidators have initiated court proceedings against Lim Oon Kuin, the founder of the now-defunct oil trading company Hin Leong Trading, alleging a pattern of fraud that they contend necessitates the Lim family to be held accountable for their actions. The liquidators are seeking a substantial sum of US$3.5 billion (S$4.7 billion) to address the debts accumulated by the company.
The court case, which unfolded on Thursday, centres around allegations that the 81-year-old former oil tycoon, commonly known as OK Lim, along with his children, engaged in deceptive practices to portray Hin Leong as a profitable and robust enterprise, despite its enduring financial losses spanning several years.
Hin Leong Trading, a significant player in the oil trading industry, reportedly incurred staggering losses amounting to approximately US$808 million from futures and swaps during the period of 2010 to 2020. These losses were allegedly concealed through a sophisticated manipulation of financial records, which the liquidators assert inflated profits by a staggering US$2.1 billion within the same timeframe.
The labyrinthine web of alleged fraudulent activities includes tactics such as providing false cargo ownership pledges, exaggerating inventory quantities, and orchestrating fabricated sales contracts and invoices. The alleged schemes, designed to deceive financial institutions, enabled Hin Leong to secure financing under false pretences, compounding the severity of the financial distress.
Hin Leong Trading, now in the midst of compulsory liquidation, seeks to compel Lim and his two children, Evan Lim Chee Meng and Lim Huey Ching, to bear the responsibility of settling the company’s entire unsecured debt, amounting to US$3.5 billion as of April 2020. The liquidators are also pursuing a declaration that the three individuals be held personally liable for the entirety of Hin Leong’s financial obligations.
Furthermore, the liquidators are demanding the return of US$90 million in dividends that were reportedly distributed to the Lim family in 2017 and 2018, despite a lack of corresponding profits during that period.
During the opening statements of the case, lead counsel for the liquidators, Senior Counsel Cavinder Bull from Drew & Napier, asserted that the Lim family deliberately concealed the true financial condition of Hin Leong, maintaining a façade of prosperity while the company was, in reality, “massively insolvent.” Bull detailed a series of deceptive tactics employed by the Lims, including falsifying documents and manipulating accounting entries.
