The founder and director of major Singapore oil-trading company Hin Leong Trading Pte Ltd (HLT) directed the firm not to disclose hundreds of millions of dollars in losses over several years, he said in a court filing reviewed by Reuters.
The affidavit signed by Lim Oon Kuin, a Chinese immigrant in his 70s widely known as O.K. Lim, is part of a Friday filing to the Singapore High Court by HLT and subsidiary Ocean Tankers (Pte) Ltd, seeking a six-month moratorium on debts of US$3.85 billion to 23 banks, reported Reuters.
The filing cites a collapse in the oil price and the Covid-19 pandemic, which has hammered oil demand and pushed up costs for HLT, one of Asia’s giant oil traders.
Seven years earlier the oil trader Hin Leong appeared to be financially stable when it announced a US$3 billion Asia investment programme in a number of countries, including Myanmar and Indonesia.
Bloomberg also reported that HLT faces strong financial difficulties, as some lenders, such as ABN Amro Bank NV and Societe Generale SA, have filed charges against the company, while HSBC has also expressed its concerns about HLT's ability to finance its debts.
Lim claimed in the filing that despite reporting net profits of US$78.2 million for the business year ended in October, “HLT has not been making profits in the last few years.”
The company “suffered about US$800 million in futures losses over the years but these were not reflected in the financial statements,” he added.
“In this regard, I had given instructions to the finance department to prepare the accounts without showing the losses and told them that I would be responsible if anything went wrong.”
Neither OK Lim or HLT have responded to questions about how the latest US$800 million loss or how this years oil price crash could have caused the losses seen over the last few years.
However, Lim, the founder and director of HLT and Ocean Bunkering, resigend his position after telling creditors the company had liabilities of US$4.05 billion against assets of US$714 million as of April 9.
Reuters first disclosed the existence of Lim’s affidavit spelling out the losses and specifics including his acknowledgement of personal responsibility for not reporting the losses, while Bloomberg cited the US$800 million in losses in a report on 19 April.