SINGAPORE: The founder of homegrown oil trader Hin Leong Trading was charged in court on Friday (Aug 14) with abetment of forgery for the purpose of cheating, the police said in a news release.
Lim Oon Kuin’s charge relates to him instigating a Hin Leong employee to forge a document purportedly issued by UT Singapore Services, said the authorities.
“The document stated that Hin Leong had transferred more than one million barrels of gasoil to China Aviation Oil (Singapore) Corporation,” the police said.
“The document was allegedly used to secure more than US$56 million (S$76.9 million) in trade financing from a financial institution.”
If found guilty, Lim could be jailed for up to 10 years and fined.
Investigations are ongoing into other offences allegedly committed by Lim, the police added.
The police confirmed they were investigating Hin Leong earlier in April.
The confirmation came after the firm filed for bankruptcy protection amid a startling revelation from its billionaire founder that it had failed to disclose hundreds of millions in losses over several years.
Lim had directed the company to hide nearly US$800 million in losses from speculating oil futures over the years.
An affidavit signed by Lim cited the dramatic collapse in global oil prices – brought about by the COVID-19 outbreak and a price war among the oil majors – and a lack of hedging policies among factors behind the company’s financial distress.
The affidavit, which said Mr Lim was resigning immediately as director of the family-held company, did not specify over how many years the losses were incurred.
One of the country’s largest independent oil traders, Hin Leong, which means “prosperity” in Chinese, is now struggling to repay debts of US$3.85 billion.
The troubles at the firm are said to affect 23 banks, with HSBC reportedly having the biggest exposure at about US$600 million, followed by ABN Amro at US$300 million.
In May, Singaporean shipping firm Ocean Tankers, a unit of Hin Leong, applied to be placed under the management of a court-appointed supervisor.
READ: Hin Leong’s financial woes have ‘no serious impact’ on Singapore’s oil trading, bunkering sectors: Agencies
A report later filed in June in the High Court later found Hin Leong obtained financing from various banks for cargoes of oil which did not exist, complicating the competing claims of ownership.
The oil inventories that Hin Leong did have include diesel on three tankers that arrived fully loaded in Europe last month, and which have since been floating off the United Kingdom and France, shipping data on Refinitiv's Eikon showed.
The ownership of the fuel on four floating storage units off Malaysia is also in dispute, the report said.