Monday, April 20, 2020

FT Backgrounder On Singapore's Hin Leong Trading (and some MAJOR accounting issues)

From the Financial Times, April 20: 

Hin Leong founder says $800m of losses not recorded
Inventory sale proceeds alleged to have been used as general funds even though they were part of bank deals
Neil Hume in London and Stefania Palma in Singapore
Hin Leong Trading, the Singapore oil trader that has filed for bankruptcy protection, suffered $800m of losses that were not reflected in its financial statements on the instruction of its founder Lim Oon Kuin. In a filing to Singapore’s High Court, Mr Lim said he had directed the company’s finance department not to disclose the losses, which were sustained in futures markets. 
“The payments made by HLT to satisfy margin calls made in respect of such losses were reflected as ‘accounts receivables’ and remained recorded as such after the losses were realised,” Mr Lim said in a signed affidavit seen by the Financial Times.

He also revealed that he had sold a “substantial part” of the company’s oil inventories and used the cash as general funds even though it was the subject of inventory financing agreements with banks. “As a result, there is a large shortfall of inventory as compared to the quantum of inventory which has been secured in favour of the bank lenders who had provided inventory financing,” said the affidavit....
....MUCH MORE
 
HT: the FT's Robert Smith:
 
Recently:
Apr. 14
Singapore Oil Trader Hin Leong Trading Is On The Ropes With No Help From Bankers
Apr. 15
Singapore's Hin Leong Still Fueling Ships, Rescue Complicated By $4.25 Billion Debt
Apr. 16
Uh Oh: Singapore's Hin Leong Will Suspend Marine Fueling Operations As Soon As April 17
April 19  
Shipping/Fuel: Singapore's Hin Leong Trading Is Bankrupt, Probable Disclosure and Bank Fraud Issues (HSBC exposure $600 Mil US)
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