Judgment reserved on application to freeze Hin Leong's Lim family's assets worldwide

Lim Oon Kuin's Hin Leong failed in a year-long effort to restructure about US$3.5 billion in debts after the Covid-19-led oil crash laid bare huge losses.
Lim Oon Kuin's Hin Leong failed in a year-long effort to restructure about US$3.5 billion in debts after the Covid-19-led oil crash laid bare huge losses.PHOTOS: REUTERS, ST FILE

SINGAPORE - The Singapore High Court has reserved judgment on an application by judicial managers of insolvent Hin Leong Trading to freeze the Lim family's assets worldwide to recoup US$3.5 billion (S$4.7 billion) of debt from the collapsed oil trader.

The mareva injunction application, which was filed by judicial managers-turned liquidators Goh Thien Phong and Chan Kheng Tek of PricewaterhouseCoopers, covers the family's assets from real estate to club memberships, insurance policies, shares, cash and investments.

Following a full-day hearing in chambers on Monday (April 5), Justice Kannan Ramesh reserved judgment for a later date.

Senior Counsel Cavinder Bull from Drew & Napier, who represents PwC, declined to comment. An e-mail to the family's lawyer Jaikanth Shankar of Davinder Singh Chambers went unanswered.

Last August, PwC sued to force former tycoon Lim Oon Kuin, better known as O.K. Lim, as well as his son Evan Lim Chee Meng and daughter Lim Huey Ching, to repay the US$3.5 billion debt and $90 million in dividends that they allegedly paid themselves even though their company was insolvent. PwC alleged that they breached their fiduciary duties as directors and engaged in fraudulent trading.

The injunction application was made to ensure there are enough proceeds for the liquidators to enforce against, should they win the lawsuit.

In recent months, a number of multimillion-dollar asset sales have been made.

These include the Lim family's 41 per cent stake in Universal Terminal, one of the biggest oil and shipping assets they had held, which was sold last month to Singapore port operator Jurong Port.

Both parties declined to reveal further details of the investment, including the price, but market sources have pegged the deal at between $400 million and $500 million.

One-third of the roughly 150 ships owned by the family's Xihe Group have been sold for at least US$420 million, according to Reuters, citing VesselsValue, which tracks ship sales.

The Lim family told The Straits Times last month: "Our advisers had earlier informed the JMs (judicial managers) and the ISC (informal steering committee) of lenders that the proceeds of any sale of our, i.e. their clients', assets will be paid to SPVs (special purpose vehicles) whose board has independent directors."

In addition to PwC's suit, HSBC, Hin Leong's largest creditor with about US$600 million owing, also took legal action against the family, followed by Bank of China.

They are among more than 20 banks trying to recover billions of dollars in loans to the trader after Hin Leong collapsed last year following an oil price plunge that triggered a default that exposed years of hidden losses and alleged fraud by the family.

Shipping arm Ocean Tankers filed for judicial management last May, and in August last year, the court approved OCBC's application against Lim family-owned Xihe Holdings and subsidiaries. Hin Leong was wound up last month.

Meanwhile, another 23 charges of forgery-related offences are expected to be tendered on April 8 against the elder Lim, prosecutors said last week.

In August and September last year, Lim was hit with two counts of abetment of forgery for the purpose of cheating. He is accused of instigating a Hin Leong employee to forge an e-mail and another document in order to obtain more than US$56 million in trade financing, according to the police.