Shipping Magnate O.K. Lim Faces $3.5B Suit Over Alleged Fraud
Singaporean shipping and petroleum magnate O.K. Lim faces criminal charges over alleged financial improprieties at his trading house, Hin Leong Trading. Now, he and his family must also contend with a multi-billion-dollar civil suit brought by the judicial manager of the now-bankrupt firm.
The new court-appointed manager, PricewaterhouseCoopers, is
suing Lim and members of his immediate family to recover a total of about $3.5
billion in losses that they allegedly caused through "the manipulation of
Hin Leong's accounts through irregular accounting entries" and other
fraudulent practices. The suit contends that O.K. Lim, his daughter Huey Ching
and his son Chee Meng failed in their fiduciary duties to the firm by
deliberately hiding trading losses and making the firm look profitable long
after it had passed into insolvency. Their methods allegedly included
overstating the firm's inventory and accumulating more debt by deceiving
lenders. O.K. Lim has already admitted to hiding about $800 million in losses
at Hin Leong over a ten year period.
Earlier this month, Lim was charged with the crime of
"abetment of forgery for the purpose of cheating" in connection with
one allegedly fraudulent trade financing transaction at Hin Leong. According to
prosecutors, OK Lim instructed a Hin Leong executive to falsify a document on
the letterhead of a tank farm operator. The document purported to show a transfer
of about one million barrels of gasoil to a Hin Leong customer. This document
was then allegedly submitted to a financial institution as part of a fraudulent
application for $56 million in trade financing. If convicted, Lim could face a
fine and a prison term of up to 10 years. For now, Lim is out and awaiting
trial after paying $2.2 million in bail.
Lim's related businesses, Xihe Holdings and Ocean Tankers,
have also been placed under court-appointed management upon requests from their
creditors. The judicial manager for Ocean Tankers, Ernst & Young, alleges
that the shipping firm transferred $19 million to the Lim family's personal
bank accounts shortly before the company applied for debt relief. E&Y has
filed a separate civil suit in an attempt to recover the funds.
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