Singapore oil trader hid US$800 million of losses before collapse that stuns lenders including HSBC, DBS

Hin Leong Trading failed to declare losses over the years, sold inventories pledged as collateral for loans, people with knowledge said

Company has filed for court protection to fend off creditors in yet another financial scandal to emerge in the oil trading hub

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Boats sail past Pulau Bukom oil refinery along the southern coast of Singapore. The city state which has built itself into one of the world’s most important oil markets and the biggest ship fuelling hub. Photo: Reuters

Published: 6:00am, 20 Apr 2020Updated: 9:32pm, 21 Apr 2020

The son of the founder of Singapore oil trader Hin Leong Trading said the company hid about US$800 million in losses racked up in futures trading, suggesting a much bigger hole in its finances than thought, according to people with knowledge of the matter.

Hin Leong, one of the biggest and most secretive forces in the world of physical fuel-oil trading, filed for court protection from creditors last week after hiring law firm Rajah & Tann as advisers to talk to its lenders, the people said.

The closely held company ran into financial difficulties earlier this month after some lenders pulled its credit lines amid concerns over its ability to finance its debts. The oil trader is said to owe almost US$4 billion to more than 20 banks.

Its downfall shows the depth of the fallout from the slump in oil prices so far this year as a consequence of the Saudi Arabia-Russia price war and the coronavirus pandemic. The trader’s troubles have rippled through the oil trading community in Singapore, one of the world’s most important oil markets and the biggest ship fuelling hub.

Lim Chee Meng, the only son of founder Lim Oon Kuin, said the company also sold some of the million of barrels of refined products it had used as collateral to secure loans from its banks, according to the people, citing an April 17 email sent by the shipping affiliate of Hin Leong, notifying recipient parties of proposed moratorium proceedings.