The High Court has appointed an independent supervisor to oversee the restructuring of oil trader Hontop Energy (Singapore).
The move came after Malaysian lender CIMB Bank, its biggest creditor, raised concerns about what it described as "suspicious" deals involving oil major BP, according to an affidavit filed with the court last week.
Hontop, the trading arm of Chinese independent refiner China Wanda Holding Group, is one of four commodity trading firms in Singapore which ran into financial trouble as the oil prices crashed.
DBS Bank, one of Hontop's creditors, had earlier appointed accounting firm KPMG as Hontop's receiver.
CIMB is seeking repayment of US$105 million (S$146.4 million) it lent the company.
In the affidavit requesting the appointment of an independent supervisor to run Hontop's affairs, CIMB detailed how it lent Hontop the money to finance two crude oil deals late last year in a section entitled "suspicious transactions". In total, Hontop owes nearly US$470 million to seven banks, according to a list of creditors included in the affidavit.
RSM Corporate Advisory has been named interim judicial managers following the bank's application, according to CIMB's law firm Rajah & Tann and the affidavit.
Hontop Energy and its lawyer TSMP Law Corporation did not respond to e-mails and calls seeking comment about CIMB's affidavit and the appointment of RSM. Calls to Wanda's Dongying headquarters went unanswered. RSM did not respond to a request for comment.
CIMB said it does not disclose or comment on specific names or clients. BP declined to comment.
The deals cited by CIMB in its affidavit involved Hontop buying cargoes from Sugih Energy International, now known as Aeturnum Energy International (AEI), and telling CIMB it was reselling them to BP Singapore, a unit of BP. Focus Law Asia, representing AEI, confirmed the transactions with Hontop.
In the first deal, CIMB agreed to finance Hontop's sale of Russian ESPO crude on board vessel Green Attitude to BP on an "open account" basis, where goods are shipped and delivered before payment is due, according to the affidavit.
When CIMB reached out to BP for payment in February, the oil major told the bank that the contract and payment for the cargo had been subject to a separate agreement between BP and Hontop, and because it had not received payment from Hontop, it was not obliged to pay Hontop or CIMB for the cargo, according to the affidavit.
BP did not specify what the agreement was about or say why it was meant to receive a payment from Hontop. "It appears to be the case that, when applying for financing, Hontop neglected to disclose to CIMB material details about the nature of its agreement with BP," BP said in a Feb 20 letter to CIMB, a copy of which was appended to the affidavit.
In the second deal, for one million barrels of Russian Export Blend crude on board vessel Gem No. 5, BP told CIMB in January that it did not enter into any contracts relating to this cargo.
The Singapore police did not respond to a request for comment.
REUTERS
