Hin Leong court officials win bid to freeze Lim family’s global assets
The court managers (JM) of the insolvent Hin Leong Trading have won a legal victory in the High Court to freeze the assets of the Lim family around the world in their attempt to recover $ 3.5 billion (4.66 billion of dollars) of collapsed oil trader’s debt.
The Mareva injunction application, filed by court managers-turned-liquidators Goh Thien Phong and Chan Kheng Tek of PricewaterhouseCoopers (PwC), covers the assets of the Lim family, from real estate in Singapore and Australia to club memberships, insurance policies, stocks, cash and investments.
In an email viewed by The Sunday Times (ST), Mr Goh told creditors of Hin Leong Trading that the High Court issued an oral judgment on Friday, granting the Lim family’s claim to freeze assets in worldwide, up to a value of US $ 3.5 billion.
This follows the court’s decision to reserve judgment after a full-day hearing on April 5.
The injunction means the Lim family will not be able to dispose or manage their assets up to US $ 3.5 billion, except for exceptions such as living expenses and legal fees.
They must also disclose all of their assets worldwide to liquidators, ST understands.
Last August, PwC, represented by senior lawyer Cavinder Bull of Drew & Napier, filed a lawsuit to force Hin Leong founder Lim Oon Kuin, better known as OK Lim, as well as his son Evan Lim Chee Meng and his daughter Lim Huey Ching, to repay the $ 3.5 billion in debt and $ 90 million in dividends they would have paid themselves even if their company were insolvent.
PwC alleged that it breached its fiduciary duties as directors and engaged in fraudulent transactions. On April 30, Singapore prosecutors indicted Elder Lim with 23 counts of counterfeiting-related offenses.
The injunction request was made to ensure that there is enough proceeds for the liquidators to argue against, if they win the lawsuit.
“Our lawyers will be taking the next steps in the coming days, including requiring the Lim family to disclose their assets by affidavit,” Goh said in his email Friday. “We are also aware that the Lim family can file an appeal,” he added. ST has emailed his lawyers at Davinder Singh Chambers for comment.
An appeal does not stay the asset freeze order unless the court allows it, sources familiar with the matter told ST.
Over the past few months, there have been a number of multi-million dollar asset sales. These include the family’s 41% stake in Universal Terminal, one of their largest oil and marine assets. The stake was sold in March to the operator Jurong Port.
The two sides declined to reveal details of the deal, including the price, but market sources put it at between $ 400 million and $ 500 million.
Last August, PwC, which is represented by senior attorney Cavinder Bull of Drew & Napier, filed a lawsuit to force Hin founder Leong Lim Oon Kuin, better known as OK Lim, as well as his son Evan Lim Chee Meng and his daughter Lim Huey Ching, to repay the debt of 3.5 billion US dollars and 90 million dollars in dividends that they would have paid themselves even if their company were insolvent.
A third of the roughly 150 ships belonging to the family’s Xihe Group have been sold for at least US $ 420 million, Reuters said, citing VesselsValue, which tracks ship sales.
The family told ST in March that their advisers previously informed the JMs and the informal lender steering committee that the proceeds from any sale of their clients’ assets would go into special purpose vehicles (SPVs) which the board has said. independent directors. SPVs are separate legal entities created for a limited business purpose.
An empire in ruins, covered in debt
The court administrators’ legal victory on Friday is a significant development in light of the millions of dollars in assets the Lim family have sold in recent months.
This latest development is another setback for former Hin Leong tycoon and founder Lim Oon Kuin, who earlier this month was charged with 23 counts of counterfeiting.
At his peak, Mr. Lim was on Forbes’ 2014 Singapore Billionaires List with a net worth of US $ 1.8 billion.
However, in April last year, he took it off the list after Hin Leong filed for bankruptcy protection and admitted he ordered the company to hide around $ 800 million. US ($ 1 billion) losses on futures contracts.
Since then, his empire has crumbled around him.
Hin Leong is currently the subject of a police investigation and increased scrutiny by several regulators. Lim and her two children also face a number of lawsuits from bank creditors trying to recover more than US $ 3.5 billion from the company.
This after its judicial director, PricewaterhouseCoopers (PwC), filed a lawsuit last August to force Lim and his two children to repay the debt of US $ 3.5 billion and $ 90 million in dividends they allegedly received. paid even though their business was insolvent.
In PwC’s lawsuit, Lim and her two children were accused of “deliberately covering up Hin Leong’s losses and portraying it as a profitable business when in fact it was massively insolvent.”
The alleged fraudulent activity included “creating fictitious gains to conceal accumulated business and other losses, falsifying documents, manipulating Hin Leong’s accounts through irregular book entries, overestimating Hin Leong’s inventory and the like. ‘Obtaining funding through inappropriate means’. .
As a result, they presented “a very misleading picture of its financial health to external parties and deceived its lenders into granting them financing, even though Hin Leong has been insolvent since the fiscal year ended October 31, 2012,” the lawsuit says. .
Lim founded Hin Leong Trading in 1963 at the age of 20, with a single truck delivering diesel to fishermen and small rural power producers.
By the age of 30, the Chinese immigrant, widely known in the industry as OK Lim, had built up a tanker fleet and incorporated Hin Leong in 1973 as an oil trading company.
In 1978, Ocean Tankers was incorporated as a charter and ship management company and has grown to become one of the largest tanker fleet operators in the world. Its fleet of over 150 vessels is largely chartered by the family-owned company Lim Xihe Holdings, Xihe Capital and their subsidiaries.
But last May, Ocean Tankers filed for judicial management, and in August, the court approved OCBC Bank’s claim against the family-owned Xihe Holdings and its subsidiaries.
Hin Leong was liquidated in March of this year.
The asset freeze order is also a step forward for creditors, including HSBC, Hin Leong’s largest creditor with around $ 600 million to pay. It is among more than 20 banks trying to claw back billions of dollars in trader loans after Hin Leong collapsed last year following a drop in oil prices that triggered a default that exposed years of hidden losses and so-called fraud.
The company was dissolved in March of this year.
Source: Straits Times