SINGAPORE: On August 10th, the founder of the defunct oil trading company Hin Leong Trading, Lim Oon Kuin, was sued by liquidators. According to reports, they have to pay US$3.5 billion ($4.7 billion) in company obligations in addition to being held accountable for what they claim was years of deception.
According to CNA, the 81-year-old former oil billionaire, better known by his stage name OK Lim, and his children allegedly tried to portray Hin Leong as a successful and healthy company to continue obtaining finance, despite the fact that the company had been racking up significant losses for years.
The Lims allegedly misled banks into extending funding by hiding his genuine financial situation. The alleged scams involve selling the same cargo to many parties, pledging cargo that Hin Leong did not own or overstating the amount it did, and utilising forged sales contracts and invoices.
Lim, his daughter Lim Huey Ching, son Evan Lim Chee Meng, and the compulsory liquidation are being ordered to pay Hin Leong US$3.5 billion. As of April 2020, this sum represents the total amount of the company’s unsecured loans.
The three Lims are being held legally accountable for all of Hin Leong’s debts, according to the liquidators’ request.
The Lim patriarch and his two children are also being asked to repay US$90 million in dividends that were not properly paid to them through 2017 and 2018.
Alternatively, they are requesting compensation for the Lims’ violations of fiduciary and other obligations.
The lead attorney’s opening statement made it clear that even though Hin Leong had been bankrupt since 2012, the Lim family had allowed the business to carry on under the pretence that it was profitable while also racking up new debt, according to the attorney.
“They did this through fraudulent and dishonest activity, including, among other things, the creation of fictitious gains to conceal accumulated trading and other losses, forging documents, manipulating Hin Leong’s accounts through improper accounting entries, overstating Hin Leong’s inventory, and obtaining financing through dishonest means,“ he said.
Even though Hin Leong had been bankrupt since 2012, the Lim family allowed the business to carry on under the pretence that it was successful while racking up new debt, according to the attorney.
Both Lim’s children served as directors of Hin Leong, with Mr. Evan Lim serving as an active trader and his sister overseeing the finances and accounts, according to Mr. Bull.
Along with continuing to operate under this ploy, the Lim family also got Hin Leong to pay them US$90 million in dividends in 2017 and 2018, despite the fact that the company was losing money at the time, according to Mr. Bull.
He claimed that Lim had ordered the concealment of losses totaling roughly US$800 million, and he later assured staff that he would bear responsibility for it.
However, Mr. Bull said that Lim and his son presently “sing a different tune” and deny any fraudulent activity, in contrast to their early statements to the matter.
He claimed that currently, they accuse their employees.
Mr. Bull asked the court to consider why “mere employees” who had no personal stake in the scam would act in such a way.
Mr. Bull said, “The Lim family must be held accountable for their dishonest behaviour.”
Additionally, the Lims are being sued by the Hongkong and Shanghai Banking Corporation (HSBC) for two applications that the bank claims were submitted with false documentation and resulted in the bank paying Hin Leong US$111.7 million in March 2020.
Senior Counsel Sarjit Singh Gill, the lead attorney for HSBC, claimed it was “diabolical” of the Lims to try to discredit workers who were “so loyal to them” when it was the Lims who “stood to gain from all these shenanigans.”
According to reports, Lim was represented by a group of solicitors from Davinder Singh Chambers under the direction of Senior Counsel Davinder Singh.
His daughter is being defended by a group from Advocatus Law, while his son was also represented by attorneys from Damodara Ong LLC.
The trial for criminal violations against the oil tycoon is still going on in the State Courts as the civil lawsuit before Justice Philip Jeyaretnam begins.
Charges of defrauding a bank and encouraging forgery involving US$111.7 billion are the subject of his criminal prosecution.
In October, Lim was scheduled to return to the State Courts for the next round of his criminal trial.