By (Bloomberg) — Singapore oil tycoon Lim Oon Kuin will be sentenced on November 18 for cheating and forgery in one of the biggest trading scandals to rattle the energy-trading hub.
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In a Singapore court on Tuesday, public prosecutor Christopher Ong argued for a 20-year jail sentence for Lim on three counts, including instigating forgery and deceiving HSBC Holdings Plc. Lim’s defence lawyers led by Davinder Singh sought a 7-year period.
The 82-year-old known as OK Lim arrived in court in a wheelchair.
The sentence is the latest development in the dramatic downfall of the founder of now-defunct oil company Hin Leong Trading Pte. Lim filed for bankruptcy this week after agreeing to pay $3.59 billion to the liquidators and creditor HSBC to resolve multi-year civil lawsuits against him and his family.
In 2020, Bloomberg News was the first to report that at least two lenders had frozen credit lines to Hin Leong, citing concerns over the company’s ability to repay its debts. In the months that followed, it emerged that Lim had hid hundreds of millions in losses speculating in oil futures and sold inventories that were pledged as collateral for loans.
Storied Trader
Lim, better known as OK Lim, founded Hin Leong in 1973 as an oil distributor with one truck. Over the years, he expanded the family-run company into Singapore’s largest independent oil trader with interests from bunkering to storage.
In its heyday, the homegrown trading house was widely respected as one of the boldest and most secretive traders of diesel and shipping fuel. The company, which owned a stake in storage tanks in Singapore as well as its own vessel fleet, was able to corner the market with its knowledge of inventories in and around the hub, cementing its position as one of the region’s top players.
A plunge in oil prices in 2020, however, sent Lim’s empire tumbling down. He had initially faced 130 charges after his firm was accused of hiding more than $800 million in losses and leaving more than 20 banks with huge liabilities.
Hin Leong’s case has tarnished Singapore’s hard-earned reputation as a leading hub for energy trading and financing, and dented public confidence in the city-state, said prosecutor Ong. He described the scandal as “unprecedented” in the country’s history, a label that Lim’s lawyer Singh passionately argued against, citing more severe offenses and losses in previous cases including one involving Agritrade International Pte.
READ: Singapore Jails Ex-Agritrade CFO 20 Years for Duping Banks
In recent years, Singapore has been rocked by numerous commodity trading and financing scandals. From Agritrade to Noble Group Ltd, and ZenRock Commodities Trading Pte. to Hontop Energy (Singapore) Pte. Ltd., issues surrounding fraud and forgery around paperwork that form the backbone of commodity financing have come to the fore, implicating dozens of banks including HSBC, DBS Group Holdings Ltd and CIMB Bank.
Lim and his family have been seeking to raise money by selling assets including property and business holdings in recent years. Singh, who’s representing Lim, highlighted his client’s state of health and the potential effects of a jail sentence on the octogenarian.
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