Hin Leong founder reveals unrecorded losses of $800m

The founder of oil trader Hin Leong Trading has admitted ordering the non-reporting of $800m (£643m) of losses before the Singapore company filed for bankruptcy.

Lim Oon Kuin said in a filing to Singapore's high court that he told the company's finance department not to disclose the futures market losses suffered by the company, whose creditors are reported to include HSBC and Standard Chartered.

"The payments made by HLT to satisfy margin calls made in respect of such losses were reflected as 'accounts receivable' and remained recorded as such after the losses were revealed," Lim said in an affidavit reported by the Financial Times.

Hin Leong filed for bankruptcy protection on Friday night. The company has been hit by the plunge in the price of oil but the filings show that its problems existed before the Covid-19 crisis.

Lim, who founded the company 1n 1963, also said he had sold a "substantial" part of the company's oil inventories and deployed the cash for general purposes even though it was used for inventory financing with banks. HSBC is reported to have the biggest exposure to Hin Leong with $600m of the company's $3.85bn debt.

Standard Chartered is also reported to be one of company's lenders along with ABN Amro, which is owed $300m, and Societe Generale, which lent $240m. ShareCast contacted HSBC and Standard Chartered for comment.