HONG KONG • Lenders, including ING Bank, have accused a Singapore commodities company of fraud after it defaulted on debt and left the financiers facing potential losses on hundreds of millions of dollars in their liabilities.
ING Bank alleged that Agritrade International, its chief executive Ng Xinwei and his father Ng Say Pek misrepresented the company's financial position to various bank lenders, in a Feb 12 filing to a Singapore court.
Agritrade officials declined to comment. Mr Ng Xinwei noted in a Feb 10 court filing that allegations of fraud perpetrated by Agritrade International "and/or its directors" had been made by banks, including MUFG Bank and Natixis. His lawyer said nothing linked him to fraud.
Agritrade International, whose businesses span palm oil and coal mining, is the latest commodities company to come under financial strain amid coal and oil market turmoil. Its subsidiary, Agritrade Resources, which operates mines in Indonesia and China, is in default on a total of US$244 million (S$340.4 million) of loans.
A group of 15 lenders, including ING, Malayan Banking, Natixis, MUFG Bank and Commerzbank, held approximately US$600 million of Agritrade International's US$1.5 billion of liabilities, according to the ING Bank filing.
The amount held by Malayan Banking was US$107.6 million, while ING and MUFG held US$96.9 million and US$77.3 million respectively, ING's Feb 12 filing detailing banks' exposures showed.
ING alleges that Agritrade issued multiple "overlapping" bills of lading, or lists of shipment goods, to obtain financing from multiple banks for the same shipment. Commerzbank believes that shipments of coal it had financed did not exist, after it hired a coal specialist to investigate, according to a filing.
Commodities companies have been under severe stress globally, as China's economic growth slows and oil prices remain depressed.
ING alleged in its Feb 12 filing that Agritrade's current predicament is due to "a massive and premeditated fraud" perpetrated by Mr Ng Xinwei and Mr Ng Say Pek, who founded the business.
Mr Bazul Ashhab, a lawyer representing Mr Ng Xinwei, said his client "has never been involved" in the company's trading business, which was run by Mr Ng Say Pek.
When allegations of fraud surfaced, Mr Ng Xinwei immediately took steps to increase the scope of an independent financial adviser's role in carrying out investigations, which shows that "there is nothing that links Mr Ng Xinwei to the fraud" perpetrated against Agritrade International, the lawyer said by e-mail.
Mr Ng Say Pek stepped down as chairman of Hong Kong-listed Agritrade Resources this month.
In the Feb 10 court filing, Mr Ng Xinwei said his father flew out of Singapore around Dec 21. He said he understood that his father went to China, and had no knowledge of whether he intended to return to Singapore.
A Singapore court dismissed this month an application by Agritrade International for a moratorium against lenders taking action, and it appointed interim judicial managers over the company.
Mr Ng Xinwei remains a director and is assisting the managers to negotiate a proposal from an investor to inject funds and repay its creditors, according to his lawyer.
ING Bank also alleged that Agritrade and Mr Ng Xinwei failed to disclose a raid by Singapore's Commercial Affairs Department (CAD) of Agritrade's office on Jan 15.
A CAD spokesman said it was inappropriate to comment on ongoing investigations.