SINGAPORE — Hin Leong founder Lim Oon Kuin has been convicted of two cheating charges and one count of instigating forgery for the purpose of cheating in what prosecutors have described as "one of the world's largest collapses of an oil trading firm".

Prosecutors alleged that 16 banks in Singapore suffered US$291.9 million (S$395.1 million) in actual monetary losses out of the US$2.7 billion in loans they were duped into extending to Hin Leong by Lim. The losses are part of the alleged US$3.5 billion debt owed by Hin Leong to 23 banks.

On May 10, State Courts judge Toh Han Li found the 81 year-old former oil tycoon guilty of three charges that proceeded to trial out of a total of 130 criminal charges. The remaining 127 charges were stood down pending resolution of the 62-day criminal trial.

Lim's sentencing is scheduled for Oct 3.

He faces a jail term of up to 10 years and will also be liable to a fine for each charge of cheating and forgery.

Lim declined comment when approached by The Straits Times after the ruling was handed down on May 10.

Lim, better known as O.K. Lim, was found guilty of cheating HSBC, through his employees, by claiming that Hin Leong had entered into two contracts to sell oil to China Aviation Oil (Singapore), or CAO, and Unipec Singapore, and submitting two invoice financing applications premised on those transactions.

The judge found that the two transactions were complete fabrications, concocted on Lim's directions, and the discounting applications were supported by forged or fabricated documentation.

"For both cheating charges, there was dishonest intent on Lim's part," the judge said in his judgment, noting that Lim himself had recognised that it was not correct to submit fabricated deals or forged documents to the bank.

Judge Toh found that Lim had given instructions to Hin Leong's employees to make fraudulent discounting applications to HSBC, based on bogus invoices and forged documents in relation to purported transactions.

As a result, the bank was deceived into disbursing US$111.6 million to Hin Leong, the judge said.

Judge Toh also rejected Lim's attempt during the trial to redraft his statements recorded from interviews in 2020 with the police's Commercial Affairs Department (CAD). In one statement, Lim said he was "morally responsible" for mistakes made by his employees, as he was the "big boss" of Hin Leong.

During the trial, Lim refuted his earlier statements, saying he would not be taking responsibility for the "wrong and illegal" actions of his former employees. He claimed in court that his mental condition was "not good" at the time, due to his old age, other health issues and "various pressures".

Lim was accused of instructing Hin Leong's former contracts executive Freddy Tan to create the documents for the bogus CAO transaction and to send them to the banker department, which handled discounting applications by Hin Leong to the banks. These documents were then sent to HSBC for discounting.

In his statements to the CAD in June and August 2020, Tan implicated Lim as the one who gave him these instructions. But in May 2023, Tan changed his position and testified in court that Lim's former personal assistant Serene Seng had given him these instructions after supposedly recalling her involvement after having "thought deeper".

The judge found Tan's statements to the CAD in 2020 "accurately reflected what happened," and ruled that his evidence in court "is impeached".

Separately, Lim, his two children and Madam Seng are being sued by HSBC for US$85.3 million in damages.

Lim and his two children are also being sued by Hin Leong's liquidators over US$3.5 billion in alleged debt. Both cases are being jointly heard in an ongoing civil trial in the High Court.

ALSO READ: Hin Leong founder, facing multiple charges, sells Third Ave GCB at $26.5m

This article was first published in The Straits Times. Permission required for reproduction.