Singapore's disgraced oil tycoon Lim Oon Kuin declared bankrupt

Lim Oon Kuin and his children declared bankrupt after agreeing to pay US$3.5 billion to creditors.

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Lim Oon Kuin, the founder of Hin Leong Trading Pte., and his two children, Lim Huey Ching and Lim Chee Meng, were officially declared bankrupt on December 19, according to a government gazette published on December 27.

Known in the oil trading industry as O.K. Lim, the 82-year-old former tycoon and his children, aged 57 and 54, will have their bankruptcy estates managed by trustees Leow Quek Shiong and Seah Roh Lin of BDO Advisory.

This bankruptcy follows a legal agreement in which the Lim family consented to a judgment requiring them to pay US$3.5 billion (S$4.76 billion) to the liquidators of their collapsed company and the top creditor, HSBC.

The decision came after a 50-day civil trial. In addition to the principal amount, the family must also pay interest accrued from April 2020 up to the payment date, as well as other costs.

While the Lims have agreed to the terms, they have not admitted liability for the allegations against them, which include fraudulent trading and breach of fiduciary duties.

These charges stem from a lawsuit filed in August 2020, which claimed that the family paid themselves US$90 million in dividends despite their company’s insolvency, and sought repayment of the US$3.5 billion debt.

The Lims stated they consented to the judgment without admitting guilt to avoid further court delays, as they lacked sufficient assets to satisfy the claims.

Besides HSBC, other claimants who have accepted the offer include Sembcorp Cogen and Credit Agricole.

In November, Lim Oon Kuin was sentenced to 17 and a half years in prison for cheating and forgery in what prosecutors called one of the most significant trade financing frauds in Singapore's history.

Lim had deceived HSBC into releasing US$111.6 million to Hin Leong based on forged oil sale contracts.

Of this amount, US$85 million remains as HSBC's outstanding loss. Lim has appealed his conviction and sentence.

Hin Leong’s troubles began in 2020 when the company’s financial collapse was exacerbated by a sharp drop in oil prices.