The Singapore Police Force has opened an investigation into the decline and fall of Hin Leong Trading, a huge oil trader, which owes 23 banks a total of $3.85bn and has admitted covering up losses of $800m over a number of years.

Hin Leong and its shipping arm Ocean Tankers have sought court protection in Singapore while its bunkering division has stopped selling fuel to many clients in what is the biggest corporate collapse in the Southeast Asian republic for years.

Speculation is growing in Singapore that Hin Leong, founded in 1963 by Chinese tycoon OK Lim, could be rescued by Chinese energy major, Sinopec.