The founder of Hin Leong Trading, OK Lim, and his two children, are being sued by the company’s judicial manager, PwC, in Singapore in order to recover $3.5bn plus another $90m in dividends, according to The Straits Times.
The judicial managers have charged the Lims with a breach of fiduciary duties as directors and fraudulent trading.
The decline and fall of Hin Leong – as well as many subsidiaries including Ocean Tankers – ranks among the largest corporate collapses seen in Southeast Asia over the last decade.
The Lim family has been accused of “deliberately concealing (Hin Leong’s) losses and portraying it as a profitable company when in fact it was massively insolvent” according to court papers seen by The Straits Times.
The alleged fraudulent activity included “the creation of fictitious gains to conceal accumulated trading and other losses, the forgery of documents, the manipulation of Hin Leong’s accounts through irregular accounting entries, the overstatement of Hin Leong’s inventory and the obtaining of financing through improper means”.
OK Lim is out on bail having been charged with abetment of forgery for the purpose of cheating earlier this month.
Lim has admitted Hin Leong hid some $800m in losses incurred from futures trading over a 10-year period.
Ernst & Young, the judicial manager of Ocean Tankers, has sued the Lims over $19m allegedly transferred from Ocean Tankers’ bank account to the trio’s bank accounts just days before the company filed for a debt moratorium.
