Prosecution of Lim Oon Kuin deepens Hin Leong's woes

Singapore

THE shocking fallout of Singapore's oil trading and offshore empire Hin Leong is deepening. On Friday, its founder, tycoon Lim Oon Kuin was charged with abetment of forgery for the purpose of cheating while separately, he and his two children are facing a US$19 million claim from the court-appointed managers of one of the sprawling group's debt-hit units. (see amendment note)

Lim or OK Lim, 78, who is considered a major mover and shaker and "big brother" in Singapore's mammoth and tight-knit oil and shipping milieu, was charged via video link and granted court bail of S$3 million. The offence carries a maximum punishment of up to 10 years and a fine.

The Lim family's headache is mounting and has transfixed the city-state's oil community.

Last month, the interim judicial managers (IJMs) of Ocean Tankers Pte Ltd - one of the world's largest operators of oil tankers that was brought to its knees after trouble rocked the group's flagship Hin Leong Trading (HLT) - filed a claim against Lim, his daughter Lim Huey Ching and son Evan Lim Chee Meng.

The managers alleged that Ocean Tankers made two separate payments collectively worth US$19.02 million in April to the trio as partial repayment of shareholder's loan when the firm was insolvent and hence, are seeking to recover the sums that it deemed were "unlawful transactions", according to court documents obtained by The Business Times.

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The IJMs, Ernst & Young's Angela Ee and Purandar Rao, are also claiming for the sum to be returned to Ocean Tankers on the basis that the three individuals have breached their fiduciary duties, which required them to ensure the firm's assets were not dissipated or exploited for their own benefit at the expense of creditors.

Ms Lim and Mr Evan Lim are directors of Ocean Tankers while Lim had resigned as the company's director and managing director in April as cracks surfaced on the group's dilemma amid an unprecedented oil crash.

The claim is "frivolous and vexatious" and is an abuse of the court process, said Davinder Singh Chambers LLC, the legal firm representing the Lim family, in court documents obtained by BT.

The law firm denied that Ocean Tankers was insolvent over the periods, as alleged by the IJMs, and pointed out that Lim had provided some US$225 million in loans to Ocean Tankers and had the right to demand repayment.

A pre-trial conference on the case has been fixed for Sept 2.

Ocean Tankers was placed under IJMs on May 12. Last week, the court placed HLT under JM while the latest unit of the crumbling group to be included under a court-supervised restructuring is Xihe Group, which owns nearly all the vessels operated by Ocean Tankers.

Friday's charge against Lim arose from investigations by Singapore's white-collar crime buster, Commercial Affairs Department into HLT. According to the charge sheet, Lim instigated an employee of HLT to forge a document purportedly issued by UT Singapore Services.

The document stated that Hin Leong had transferred more than one million barrels of gasoil to China Aviation Oil (Singapore) Corp. The document was allegedly used to secure more than US$56 million in trade financing from a financial institution.

The police said that investigations are ongoing into other offences allegedly committed by Lim.

Amendment note: An earlier version of this article misstated EY's claims in Singapore dollars, when it should be in US dollars. The article has been amended to reflect this change.