Oil tycoon Lim Oon Kuin, founder of troubled Singaporean oil trader Hin Leong, denied allegations by the company's biggest creditor that he used forged documents to obtain financing.

HSBC Holdings is suing Lim, his children and a Hin Leong Trading employee to recover US$85.3 million (S$114.5 million) in financing that the bank alleges they obtained with forged accords.

OK Lim, as he is known, says the documents were "mistakenly" issued and he was not aware of the process, and not responsible for HSBC's losses. His family and the Hin Leong employee also deny the accusation, according to defence filings to a local court earlier this month.

Hin Leong's creditors, which also include DBS Group Holdings, are battling to recover funds from the insolvent firm in one of the biggest commodities trading scandals in decades. HSBC's suit, filed in late October, came two months after the trader's court-appointed managers PricewaterhouseCoopers took legal action against Lim and his family for a total of US$3.5 billion in outstanding debt.

HSBC, Europe's largest bank, has the most exposure to Hin Leong at about US$600 million, the most among 23 banks. It did not respond to a request for comment.

Both of the plaintiffs allege that Lim, his son Evan Lim and daughter Lim Huey Ching engaged in fraudulent trading. OK Lim, who founded Hin Leong in 1963, also faces two charges of document forgery for purposes of cheating, and is under an ongoing investigation by the Singapore authorities.

In the defence filing, OK Lim's lawyer claimed that he did not carry out the day-to-day operational and commercial activities at Hin Leong and left them to the employees and relevant departments.

Lim and his children were told on or around April 12 that the company had mistakenly made two requests to HSBC for discounted financing earlier this year. They informed the bank the same day, saying the company would try to repay the funds, said the filing.

Earlier, Lim said in an affidavit that he had ordered his employees to hide the losses when preparing the company's balance sheets for bank references. "I had given instructions to the finance department to prepare the accounts without showing the losses and told them that I would be responsible if anything went wrong," Lim said in the affidavit.

BLOOMBERG