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Over $800 Million Unreported! Singapore's Oil Trading Giant Filed for Bankruptcy

Hin Leong trading company has always been one of the largest and most mysterious companies in Singapore's oil trade. It filed for bankruptcy a few days ago, which also shows the deep influence of the oil price war between Saudi Arabia and Russia on the world. According to an email from the trading company's shipping company on April 17, Lim Chee Meng, the only son of Founder Lim oon Kuin, said the company also sold millions of barrels of refined oil as collateral to obtain loans from banks.

As a result, there is a huge gap between the company's holdings of oil and its commitment to banks. That could mean huge losses for banks that guarantee billions of dollars in loans to the company.

The issue for Hin Leong trading is the latest to crack down on Singapore's commodity trading. Singapore is one of the world's largest trading centers, along with Geneva, London and Houston. In the past three years, the country has witnessed the collapse of two other giants in the industry: Noble Group and agritrade.

According to a person familiar with the matter, Lim Chee Meng said he did not know the cause of the loss in recent years, and his father instructed the finance department to ignore their financial statements.

On Friday, Hin Leong trading and its tanker companies filed for bankruptcy protection. Both companies are wholly owned by the LIM family.

The company's financial difficulties have shaken Singapore's close trading circle. In the quarter ended October 31, Hin Leong reported a positive net worth of $4.56 billion and a net profit of $78 million, people familiar with the matter said. But according to documents seen by Bloomberg news, Hin Leong told creditors at the beginning of this month that as of early April, its total liabilities had reached $4.05 billion, while its assets were only $714 million, leaving a deficit of at least $3.34 billion. As of April 9, 2020, the company had no equity interest in its balance sheet and warned that "the data obtained from the company remains to be verified".

Many in the industry call Lim Oon Kuin as OK Lim and he will step down from all executive positions in Hin Leong, Xihe group and related companies from April 17, people familiar with the matter quoted by email as saying. He will also resign as a director and general manager of ocean tankers. Section 211b of the Companies Act (Companies Act) of Singapore provides that Hin Leong and ocean tankers have applied to their creditors for protection. Founded in 1963, Hin Leong has developed into one of the largest suppliers of marine fuel in Asia. Ocean tankers has more than 100 tankers of different sizes.

According to people familiar with the matter, the son of the legendary founder of Hin Leong trading, a Singapore oil trader, said the company concealed about $800 million in accumulated losses in futures trading, indicating that the company's financial deficit was much larger than people thought.