Hin Leong Trading Pte Ltd founder and director Lim Oon Kuin admitted that the company had intentionally not disclosed hundreds of millions of dollars in losses over the past several years. The troubled Singaporean oil-trading firm is currently seeking a six-month moratorium on debts amounting to around $3.85 billion owed to 23 different banks.
Lim disclosed the information through an affidavit as part of a filing to the Singapore High Court and its subsidiary Ocean Tankers on Tuesday. The 70-year old Chinese immigrant who heads the company stated in his affidavit that the collapse of global oil prices and the effects of the coronavirus pandemic had heavily affected its business. Analysts had pointed out that contributing the company's losses to the effects of the pandemic made no sense as the company has been incurring losses for years.
For its business year ending in October, Hin Leong Trading had reported net profits of over $78.2 million. However, Lim noted that the company actually hadn't made any money. According to the executive, the company had suffered around $800 million in futures losses over the past couple of years; losses that were not reflected in its financial statements.
Lim admitted that he had instructed Hin Leong Trading's finance department to omit the losses and that he was going to be responsible if anything went wrong. The affidavit itself wasn't made available to the public but several news outlets were able to obtain a copy that revealed the company's losses. Lim and his lawyer Partick Ang from Rajah & Tann Singapore LLP declined to give any further comments regarding the issue.
In the affidavit, Lim stated that he would be resigning from his position with the company immediately. His son, Evan Lim Chee Meng, a director at Hin Leong and Ocean Tankers, also signed an affidavit related to the moratorium request. Both affidavits did not detail how many years the company had not reported its losses.
Under Singapore Law, Hin Leong is protected from any legal action by its creditors and investors for up to 30 days given the signing of the affidavit. The courts will have to decide during that time to approve Hin Leong's request for a six-month moratorium.
Hin Leong had reportedly held a video conference last week with creditors and advisers to disclose its current financial position. The company reportedly revealed that it had liabilities of around $4.05 billion against its assets of only $714 million as of April 9.
