SINGAPORE - Embattled oil tycoon Lim Oon Kuin, better known as O.K. Lim, and his two children have been sued by Hin Leong Trading judicial manager PricewaterhouseCoopers Advisory Services in its bid to recover US$3.5 billion (S$4.75 billion) plus another US$90 million in dividends the Lims allegedly paid themselves even though the company was insolvent.
In court documents seen by The Straits Times, judicial managers Goh Thien Phong and Mr Chan Kheng Tek accused O.K. Lim, his son Evan Lim Chee Meng and daughter Lim Huey Ching of breach of fiduciary duties as directors and fraudulent trading.
They were accused of "deliberately concealing (Hin Leong's) losses and portraying it as a profitable company when in fact it was massively insolvent".
The alleged fraudulent activity included "the creation of fictitious gains to conceal accumulated trading and other losses, the forgery of documents, the manipulation of Hin Leong's accounts through irregular accounting entries, the overstatement of Hin Leong's inventory and the obtaining of financing through improper means".
As a result, they presented a "vastly misleading picture of its financial health to external parties and deceived its lenders into extending financing even though Hin Leong has been insolvent since the financial year ended Oct 31, 2012", Mr Goh said.
The elder Lim is out on $3 million bail after being charged on Aug 14 with abetment of forgery for the purpose of cheating.
Hin Leong is now under investigation by the police and increased scrutiny by several regulators after O.K. Lim admitted that the firm hid about US$800 million in losses incurred from futures trading over the years on his orders. Hin Leong sold a substantial part of the inventory it had used as collateral to secure loans from its banks, according to earlier court filings.
Mr Goh said there is evidence to suggest that the company had suffered accumulated derivatives trading losses of about US$808 million over the past 10 years.
In addition, Ernst & Young, the judicial manager of Hin Leong shipping arm Ocean Tankers, has sued O.K. Lim, his son and daughter over US$19 million allegedly transferred from Ocean Tankers' bank account to the trio's bank accounts just days before the company filed for the debt moratorium.