OCBC Bank has filed an application with Singapore High Court to place Xihe Holdings and four of its shipowning units under judicial management, claiming it has lost trust in the company’s management citing alleged fraud at the Xihe owner’s affiliate company Hin Leong Trading earlier this year, Business Times in Singapore reports.
Xihe Holdings is owned by Hin Leong founder Lim Oon Kuin (OK Lim) and his son. In April, Hin Leong, one of the biggest names in Singapore oil circles, and its subsidiary Ocean Tankers sought court protection.
According to OCBC Bank, Lim has admitted improper financial reporting at Hin Leong over a period of years, and it says these serious irregularities also extended to the affairs of Xihe Group.
“Especially in light of the interlinked businesses, common ownership and leadership of the Xihe Group, Hin Leong and Ocean Tankers, interim judicial managers need to be appointed urgently over the debtor companies to investigate the serious irregularities and prevent further prejudice to creditors,” the bank wrote in its filing with the Singapore High Court.
The bank has applied for Seshadri Rajagopalan and Paresh Jotangia of Grant Thornton Singapore to be appointed as interim judicial managers for Xihe Holdings and its subsidiaries Da Xin Tankers, Hua Guang Shipping, Nan King Maritime and Hua Xin Shipping.
The bank claims that the Lim family members who own and manage the Xihe Group caused the billion-dollar insolvencies of Hin Leong and Ocean Tankers by allegedly fabricating fictitious gains, forging documents on a massive scale, misusing secured inventory and misleading banks into extending finance to Hin Leong.
“OCBC strongly distrusts the current management… or any management appointed by the Xihe Group or the Lims,” OCBC said, adding that the appointment of independent judicial managers would help restore the confidence of potential investors.