Introduction

SINGAPORE – In a shocking development, the founder of the beleaguered Hin Leong, Lim Oon Kuin—commonly known in the oil trading sphere as O.K. Lim—along with his two children, Lim Huey Ching and Lim Chee Meng, were officially declared bankrupt on December 19. This news was published in the electronic government gazette on December 27, revealing the depths of financial turmoil that has engulfed the family.

Bankruptcy Declaration

The 82-year-old Lim and his children now find themselves under the stewardship of trustees Leow Quek Shiong and Seah Roh Lin from BDO Advisory, following a tumultuous period for the family. Their bankruptcy emerges from a massive financial judgment reached in September, where they agreed to pay a staggering US$3.5 billion (approximately S$4.76 billion) to liquidators appointed by the court and their main creditor, HSBC. This outcome came after an extensive 50-day civil trial, highlighting the gravity of the situation.

Debt and Legal Troubles

The significant debt they are facing is compounded by interest accumulated since April 2020, alongside additional legal costs. However, the family has expressed that they lack sufficient assets to settle the claims from various creditors and have opted for bankruptcy as a solution. Notably, while they have consented to the legal judgment, they have refrained from admitting liability regarding serious allegations of fraudulent trading and breaches of fiduciary duty linked to their roles as directors of the firm.

Legal Background

The Lims were targeted in a lawsuit filed in August 2020, compelling them to repay not only the monumental US$3.5 billion debt but also US$90 million in dividends that they allegedly distributed to themselves. This was amid growing evidence that their company was insolvent at the time. In an effort to conclude the legal battle, the family asserted that they wished to spare the court additional burden in reaching their consent judgment without accepting culpability.

Creditor Situation

Among their notable creditors, besides HSBC, are Sembcorp Cogen and Credit Agricole, who have also accepted the terms offered by the Lim family.

Criminal Conviction

Furthermore, O.K. Lim's troubles have escalated beyond financial issues. He is currently appealing a criminal conviction in which he was sentenced to 17 years and six months in prison for orchestrating a significant trade financing fraud—deemed one of the most egregious of its kind in Singapore's history. Authorities revealed that he tricked HSBC into releasing US$111.6 million to Hin Leong through the use of fabricated oil sale contracts. It is reported that a loss of US$85 million remains from HSBC, which the bank is seeking to recover. Lim’s attempts to appeal the conviction signal that this story may not yet reach its conclusion.

Conclusion

As the intricacies of this case unfold, the repercussions of the Lim family’s bankruptcy could have far-reaching implications in the oil trading industry and beyond, raising questions about corporate governance and ethical practices in the world of finance. Keep an eye on this evolving story—there may be shocking developments just around the corner!