Headlines published in the last 30 days are listed on SLW.

Prosecution alleges bogus deals made as Hin Leong needed faster cash flow for margin calls

Prosecution alleges bogus deals made as Hin Leong needed faster cash flow for margin calls

Source: Straits Times
Article Date: 21 Nov 2023
Author: Grace Leong

Hin Leong founder Lim Oon Kuin faces a total of 130 criminal charges involving US$2.7 billion in alleged fraudulent loans disbursed.

The prosecution has alleged that two bogus transactions at the centre of cheating and forgery charges faced by Hin Leong founder Lim Oon Kuin in his ongoing criminal trial were made because the company “needed faster cash flow in March 2020 to deal with margin calls it was facing”.

The former oil tycoon was charged with cheating HSBC by representing to the bank, through Hin Leong’s employees, that the company had entered into two contracts for the sale of oil with China Aviation Oil (Singapore), or CAO, and Unipec Singapore, which they said were “complete fabrications, concocted on the accused’s directions”.

The prosecution alleged that Lim instructed Hin Leong’s employees to make fraudulent “discounting applications” to HSBC, based on bogus invoices and forged documents in relation to these purported transactions. As a result, the bank was allegedly “dishonestly induced” into disbursing some US$111.6 million (S$149.5 million) to Hin Leong.

Lim faces a total of 130 criminal charges involving US$2.7 billion in alleged fraudulent loans disbursed, three of which have proceeded to trial.

During Deputy Chief Prosecutor Christopher Ong’s cross-examination of Lim’s testimony, which resumed on Nov 20 after a two-week break, the 81-year-old, also known as O.K. Lim, claimed that he did not understand what discounting applications were until April 2020.

Lim also claimed he had no idea when asked if he knew that Hin Leong had a discounting facility or trading facility with HSBC, where Hin Leong could present invoices for oil sales and the bank would pay first for oil the trader had sold.

“These are accounts matters. I have never been involved in accounts matters,” he said.

He claimed he knew that Hin Leong had such a discounting facility with HSBC only some time in April 2020 when his two children, Mr Evan Lim Chee Meng and Ms Lim Huey Ching, and then personal assistant Serene Seng told him there were two transactions that had been mistakenly discounted.

Mr Ong said: “Your claim to not have known what discounting means until April 2020 is completely incredible.”

“Since you said you are not aware what discounting is, and Serene and your children didn’t explain to you the problem with the bank, how did you know it involved a deal not done but was taken to do discounting with the bank?” he asked.

Lim replied: “Because when we (Huey Ching and Chee Meng) were together discussing, talking, we talked about this.”

Mr Ong said: “I put it to you that you were lying about how you found out about the two discounting applications that had been made to HSBC... I put it to you that you, in fact, knew about discounting long before 2020.”

Lim disagreed.

Asked if the ability to discount invoices by presenting these and getting the banks to pay in advance of the due date was a very useful financial tool that Hin Leong had, Lim said he did not understand the question.

Mr Ong said: “What is hard to understand is how you, as boss of this huge company, didn’t know that Hin Leong was able to get banks to pay invoices in advance, even if it was tens of millions of dollars. Can you explain how this is possible at all?”

Lim replied: “Oil at $100 a barrel – two million barrels will be $200 million. This is common for HL... So two invoices involving $110 million is not a big amount.”

Lim also disagreed with Madam Seng’s testimony that he was the one who decided which invoices to discount and that he would give instructions on opportunities for discounting.

Lim also disputed testimony by Ms Katherine Ong – a former accounts executive at Hin Leong – that the final decision as to which bank should do the discounting was made by him.

Asked why Madam Seng and Ms Ong would say Lim gave instructions for discounting applications, Lim replied: “Because this thing caused Serene and Katherine to do this because of margin call.” 

Asked if he meant the CAO and Unipec transactions were done by the two women because of margin calls Hin Leong was facing, Lim said he was “not clear because (he) was not involved”.

But Mr Ong reminded Lim of two statements he had given the Commercial Affairs Department’s (CAD) investigating officers in July 2020 and August 2020 saying that the CAO and Unipec transactions had been discounted because of margin calls.

Citing the August 2020 statement Lim gave to the CAD, Mr Ong asked Lim if he agreed that he had confirmed that the reason behind the CAO and Unipec transactions was that Hin Leong “needed faster cash flow in March 2020 to deal with margin calls it was facing”.

Lim disagreed.

Mr Ong also accused Lim of “making up evidence” that Madam Seng had asked him to do more trades to help with situations when cash flow was low, and “trying to pretend that (he) has no involvement” in dealing with such situations.

“I put it to you that you are lying when you say you are not involved with coming up with solutions to low cash flow situations,” Mr Ong said.

To which, Lim said he disagreed.

“I put it to you that in the course of being boss of Hin Leong until you stepped down in 2020, you would come up with solutions and give instructions to Katherine and others with regard (to) low cash flow situations,” Mr Ong said.

The prosecution also questioned Lim’s claims that he was not always kept informed of various trade facilities between Hin Leong and the banks. This was after Lim said that “more than 10 years ago, I always took part in such things. But later on, we have people under us and they can do this”.

Asked who would make the decision on which trading facilities to take up with the banks, Lim said he was not involved in such decisions.

When Mr Ong pointed to Madam Seng’s testimony that it was Lim who decided which trade facilities to take, Lim claimed that she was “being humble” and “polite and respectful because I am her boss. If she had said she is the one to make the decisions, wouldn’t it be strange?”.

The hearing continues on Nov 21.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.


Latest Headlines

Straits Times / 30 Nov 2023

WP leaders awarded costs for appeals in AHTC case

Overall, the court said the town councillors were “successful in overturning the outcome reached in the court below on the majority of the issues” and should be entitled to claiming costs.

No content

A problem occurred while loading content.

Previous Next

Terms Of Use Privacy Statement Copyright 2023 by Singapore Academy of Law
Back To Top