The Singapore police is investigating oil trader Hin Leong after the company filed for bankruptcy protection amid a startling revelation from its billionaire founder that he had directed a cover-up of hundreds of millions of dollars in losses over several years.
Reuters reported on 19 Apr that Lim Oon Kuin, a Singaporean in his 70s widely known as O.K. Lim, founder and director of Singapore oil-trading company Hin Leong instructed the company not to disclose the losses. Hin Leong, one of Asia’s largest oil traders, reportedly owed 23 banks a total of US$3 billion.
In a court filing, Lim said the company “suffered about US$800 million in futures losses over the years but these were not reflected in the financial statements. 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.”
The filing cites a collapse in the oil price and the coronavirus pandemic, which has hammered oil demand and pushed up costs.
Despite reporting net profit of $78.2 million for the business year ended in October, Lim said in the filing that Hin Leong has not been making profits in the last few years.
On 23 Apr, Reuters also reported that Chinese state energy company Sinopec is in early-stage talks with Hin Leong to buy a stake in an oil storage terminal that is partly owned by the Singapore trader, according to three sources with knowledge of the matter.
Forbes ranked Lim No. 18 on last year’s list of Singapore’s richest people with a net worth estimated at $1.65 billion. However, with the disclosure of Hin Leong’s bankruptcy filing and admission of sustained losses, Forbes now no longer considers him a billionaire.