SINGAPORE – The High Court has given the green light to the dissolution of Hin Leong Trading, marking the end of the road for the collapsed oil trading giant after almost a year of restructuring.
In a hearing on Monday morning (March 8) before Supreme Court Justice Kannan Ramesh, PricewaterhouseCoopers (PwC) Advisory Services’ judicial managers Goh Thien Phong and Chan Kheng Tek were appointed liquidators of Hin Leong.
They filed for the liquidation of Hin Leong after three potential bidders withdrew from a deal to buy Hin Leong and two affiliates as a combined entity.
The sale of Hin Leong, its shipping company Ocean Tankers, and Lim’s family-owned Xihe Holdings as a combined company would have helped regain more than the company’s estimated $ 257 million (S $ 347 million) in net worth, according to Bloomberg . Liquidating a company usually results in a fire sale of its assets, which raises less money than a formal bidding process.
Hin Leong, once one of Asia’s top oil traders, collapsed last year after falling oil prices triggered a default that exposed years of hidden losses and alleged fraud by its founder Lim Oon Kuin – better known as OK Lim – and son Evan Lim, Chee Meng and his daughter Lim Huey Ching.
PwC filed a lawsuit last August to compel Lim and his two children to repay the $ 3.5 billion debt and $ 90 million dividends they allegedly paid themselves, though their company was insolvent. PwC alleged they violated their fiduciary duties as directors and engaged in fraudulent trades.
Suspected fraudulent activities included “creating fictitious profits to cover up accumulated trade and other losses, forging documents, tampering with Hin Leong’s accounts through irregular accounting entries, overvaluing Hin Leong’s inventory and raising funds through inappropriateness Means “according to the lawsuit.
HSBC, Hin Leong’s largest creditor with roughly $ 600 million, also took legal action against the family, followed by the Bank of China. According to estimates given in court records last year, DBS, ABN Amro Bank, and OCBC Bank are each owed about $ 200 to $ 300 million.
During Monday’s hearing, the Lim family objected to the judicial managers ‘appointment as liquidators, citing a conflict of interest because they could not objectively review the judicial managers’ fees.
Instead, the family proposed Messrs. Henry Tan and Chan Yee Hong of Nexia TS as liquidators of the company.
However, the JM’s attorneys argued that there was no conflict of interest as the fees were being reviewed by the court and creditors.
The liquidators will continue the lawsuit against the Lim family, collect claims from counterparties, and dispose of Hin Leong’s remaining assets, including an industrial building on Playfair Road, ST understands.
Another problem that has yet to be resolved is the significant amount of oil cargo that is still stored in tanks at the Universal Terminal. These are under a court order that a believer has received, ST understands. The Lim family managed and owned 41 percent of the Universal Terminal through Universal Group Holdings.
Hin Leong has between 10 and 15 workers who are still needed to help with the liquidation process, ST understands.
This article was first published in The Straits Times. Permission is required for reproduction.