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Judgment reserved on JM application

Judgment reserved on JM application

Source: Straits Times
Article Date: 06 Apr 2021
Author: Grace Leong

Lim Oon Kuin's Hin Leong failed in a year-long effort to restructure about US$3.5 billion in debts after the Covid-19-led oil crash laid bare huge losses.

The Singapore High Court has reserved judgment on an application by judicial managers (JMs) of insolvent Hin Leong Trading to freeze the Lim family's assets worldwide to recoup US$3.5 billion (S$4.7 billion) of debt from the collapsed oil trader.

The Mareva injunction application, filed by judicial managers-turned liquidators Goh Thien Phong and Chan Kheng Tek of PricewaterhouseCoopers, covers the Lim family's assets from real estate to club memberships, insurance policies, shares, cash and investments.

After a full-day hearing in chambers yesterday, Justice Kannan Ramesh reserved judgment for a later date. Drew & Napier senior counsel Cavinder Bull, who represents PwC, declined to comment.

An e-mail to the family's lawyer Jaikanth Shankar of Davinder Singh Chambers went unanswered.

Last August, PwC sued to force former tycoon Lim Oon Kuin, better known as O. K. Lim, as well as his son Evan Lim Chee Meng and daughter Lim Huey Ching, to repay the US$3.5 billion debt and $90 million in dividends they allegedly paid themselves even though their firm was insolvent. PwC alleged that they had breached their fiduciary duties as directors and engaged in fraudulent trading.

The injunction application was made to ensure there are enough proceeds for the liquidators to enforce against, should they win the lawsuit.

In recent months, a number of multimillion-dollar asset sales were made. These include the family's 41 per cent stake in Universal Terminal, one of their biggest oil and shipping assets. The stake was sold last month to operator Jurong Port. Both parties declined to reveal details of the deal, including the price, but market sources have pegged it at between $400 million and $500 million.

One-third of the roughly 150 ships owned by the family's Xihe Group have been sold for at least US$420 million, said Reuters, citing VesselsValue, which tracks ship sales.

The family told The Straits Times last month: "Our advisers had earlier informed the JMs and the ISC (informal steering committee) of lenders that the proceeds of any sale of our, i.e. their clients', assets will be paid to SPVs (special purpose vehicles) whose board has independent directors."

HSBC, Hin Leong's largest creditor with about US$600 million owing, has also taken legal action. It is among more than 20 banks trying to recover billions of dollars in loans to the trader, after Hin Leong collapsed last year following an oil price plunge which triggered a default that exposed years of hidden losses and alleged fraud.

Shipping arm Ocean Tankers filed for judicial management last May, and in August, the court approved OCBC Bank's application against family-owned Xihe Holdings and its subsidiaries. Hin Leong was wound up last month.

Meanwhile, 23 more charges of forgery-related offences are expected to be tendered on Thursday against the elder Lim, prosecutors said last week.

In August and September, Lim was hit with two counts of abetment of forgery for the purpose of cheating. He is accused of instigating a Hin Leong employee to forge an e-mail and another document in order to obtain more than US$56 million in trade financing, according to the police.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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