A Singapore oil tycoon who headed an oil trading and bunkering business has been jailed for 17.5 years for cheating banks of over US$110 million.
Lim Oon Kuin, 82, better known as OK Lim, was today (18 November) sentenced for defrauding Hongkong and Shanghai Banking Corporation (HSBC) of at least US$111.7 million.
Lim founded the Hin Leong group that included an oil trading business, a physical bunker supplier, Ocean Bunkering, as well as a tanker-owning business, Ocean Tankers.
Lim used forged sales contracts that made Hin Leong appear to be selling crude oil to China Aviation Oil (Singapore) and Unipec Singapore, the trading unit of China Petroleum and Chemical Corporation (Sinopec). The forgery deceived HSBC into disbursing trade financing.
Lim’s scam was exposed in 2020, as oil prices crashed amid the Covid-19 pandemic, and it was uncovered that Hin Leong had concealed US$800 million of future losses.
Investigations also showed that Hin Leong had obtained duplicate financing from its banks, by pledging the same oil cargoes as collateral. It also turned out that Hin Leong had been loss-making for several years.
Pressing for a sentence of 20 years, the prosecution told the court that Lim engineered one of the most serious cases of trade financing fraud in Singapore and that the scams could undermine public confidence in the city-state’s oil trading market.
Lim claimed trial to more than 100 charges of cheating and forgery, but was convicted of two charges of cheating HSBC and one count of abetting forgery.
Lim’s lawyer, Senior Counsel Davinder Singh said that his client will appeal against the sentence. Bail was set at S$4 million.
Delivering sentencing, Principal District Judge Toh Han Li said that Lim’s crimes involved a “staggeringly large” amount of money compared to other cheating cases in Singapore.
The judge said Lim’s actions affected Singapore’s financial services and a deterrent sentence was needed to prevent tainting the financial ecosystem, which could lead to banks imposing stricter rules of compliance or withdrawing their trade financing services entirely.
Judge Toh said: “In my judgment, (Lim’s) offences would have the potential to impact the bunkering and oil trading sector as (Hin Leong) was one of the largest players in the industry and the offences involved trade financing fraud by (Hin Leong) of financial institutions in oil trading.”
In not acceding to the prosecution’s request for a 20-year imprisonment, Judge Toh noted that Lim did not personally benefit from his offences, but committed the scam to stave off margin calls and improve Hin Leong’s cash flow.
Martina Li
Asia Correspondent
