Hin Leong Founder OK Lim Convicted of Cheating HSBC of $111.7 Million

OK Lim, founder of Hin Leong Trading, was found guilty of cheating HSBC out of $111.7 million and faces up to 10 years in jail. The collapse of Hin Leong Trading in 2020 left 23 banks with $3.5 billion in unpaid debts.

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Hin Leong Founder OK Lim Convicted of Cheating HSBC of $111.7 Million

Hin Leong Founder OK Lim Convicted of Cheating HSBC of $111.7 Million

OK Lim, the 81-year-old founder of collapsed Singapore oil trading and tanker empire Hin Leong Trading, has been found guilty of three criminal charges for cheating banking, finance giant HSBC Holdings of $111.7 million. The State Courts judge convicted Lim of two counts of cheating and one count of instigating forgery with intent to deceive.

Why this matters: The collapse of Hin Leong Trading and the subsequent legal proceedings have significant implications for the global oil trading industry, highlighting the need for greater transparency and accountability in financial dealings. This case also serves as a warning to banks and financial institutions to exercise due diligence in their lending practices to prevent such massive frauds.

According to the prosecution, Lim defrauded HSBC by making it appear as though Hin Leong had signed two oil sales contracts with China Aviation Oil (Singapore) Corp and Unipec Singapore. Two invoice financing applications were made based on these alleged transactions, which were total fabrications generated on Lim's direction. HSBC paid Hin Leong $111.7 million as part of a Silent Confirmation and Discounting Agreement, a financing facility under which Hin Leong sold the unpaid invoices to HSBC for a discounted upfront payment.

The alleged deception led to HSBC sending letters seeking payment of the amounts owed under the invoices to China Aviation Oil and Unipec on April 20, 2020. However, both companies denied engaging in those purported transactions with Hin Leong. Hin Leong collapsed in 2020 when banks withdrew their financing after Lim admitted the company had lost large sums of money in the forward freight agreement markets.

Lim faces a possible 10-year jail term and a hefty fine for each charge. Sentencing is scheduled for October 3, 2023, and he remains out on bail until then. His remaining 127 criminal charges have been stayed until a later date. If convicted on all charges, Lim could face up to 30 years in prison and a substantial fine.

Hin Leong Trading was founded by OK Lim in 1973 and grew to become one of Asia's largest oil trading companies. At the time of its collapse in 2020, Hin Leong was estimated to owe $3.5 billion in debt to 23 banks. Prosecutors have described the company's downfall as "one of the world's largest collapses of an oil trading firm."

The conviction of OK Lim marks a significant development in the ongoing legal proceedings surrounding the collapse of Hin Leong Trading. As the case unfolds, it sheds light on the alleged fraudulent practices that contributed to the downfall of a major player in the global oil trading industry, leaving banks with billions in unpaid debts.

Key Takeaways

  • OK Lim, 81, founder of Hin Leong Trading, found guilty of cheating HSBC of $111.7 million.
  • Lim convicted of 2 counts of cheating and 1 count of instigating forgery with intent to deceive.
  • Hin Leong Trading collapsed in 2020, owing $3.5 billion to 23 banks.
  • Lim faces up to 10 years in prison and a fine for each charge, with 127 remaining charges stayed.
  • Sentencing is scheduled for October 3, 2023, with Lim remaining out on bail until then.