The Singapore High Court has ruled to place Xihe Holdings and four of its subsidiaries, owned by Hin Leong founder Lim Oon Kuin and his son, under interim judicial managers at the request of major creditor OCBC, Business Times reports.
OCBC Bank filed an application with the court last month to place Xihe 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, which was placed under judicial management in April.
Xihe subsequently put new management in place as part of a “consensual” restructuring, however OCBC said in a court document that while Xihe has taken steps to address its concerns, its actions appear to give a veneer of independence and new management instead of the actual independence guaranteed by judicial management.
The court has appointed Grant Thornton Singapore as the supervisor of Xihe Holdings and four of its subsidiaries Da Xin Tankers, Hua Guang Shipping, Nan King Maritime and Hua Xin Shipping.
Xihe Holdings questioned OCBC’s objectives for pursuing the route of judicial management.
“One thought that will continue to recur is why is OCBC, which has security over the vessels whose value is sufficient to pay it off, choosing not to enforce its security and why is it instead seeking to take control of the debtor companies, including Xihe Holdings, when it can have no conceivable interest in what happens to these companies once it is paid,” said Xihe’s counsel, Haridass Ho & Partners.
“There is clearly more to these applications than meets the eye, and it is that this is a backdoor attempt to obtain security over the Lim family’s assets for its claims against Hin Leong Trading and Ocean Tankers. This is an abuse of process and is in any event a deeply troubling feature that this Court must have regard to,” Haridass Ho & Partners added.
Xihe Holdings is the holding company for 60% of the Xihe Group’s fleet of 136 vessels, while the remaining 40% of the Xihe Group’s vessels are owned by Xihe Capital, which has yet to be involved in court cases with lenders.