In what they called “one of the world’s largest collapses of an oil trading firm”, prosecutors alleged that 16 banks in Singapore have suffered US$291.9 million in “actual monetary loss” out of the US$2.7 billion in loans that they were allegedly duped into extending to Hin Leong by Lim. The losses are part of the alleged US$3.5 billion debt owed by Hin Leong to 23 banks.
According to the prosecution’s opening statements, Lim, through his employees, had cheated HSBC by claiming that Hin Leong had entered into two contracts to sell oil to China Aviation Oil , or CAO, and Unipec Singapore, and submitting two invoice financing applications premised on those transactions.
Discounting refers to accounts receivable financing, where a seller “sells” unpaid invoices to a financial institution and typically receives a slightly discounted upfront payment. This means that the seller would only receive payment from the buyer at a later date. If the discounting application was approved, HSBC would pay Hin Leong the invoice amount and charge a fee for the transaction.
On April 8, 2020, Hin Leong notified HSBC that it was facing liquidity issues and requested a standstill agreement with its lenders. But CAO and Unipec said that they had not entered into these alleged transactions with Hin Leong and had no record of them. HSBC then lodged a police report on April 21, 2020.
The liquidators in May 2021 succeeded in obtaining a Mareva injunction to freeze the Lim family’s assets worldwide up to a value of US$3.5 billion.
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Source: staronline - 🏆 4. / 75 Read more »