O.K. Lim and kids to pay $4.5b to liquidators, file for bankruptcy
In a surprising twist, Hin Leong founder Lim Oon Kuin and his two children, Mr Evan Lim Chee Meng and Ms Lim Huey Ching, have agreed to pay US$3.5 billion (S$4.5 billion) to the liquidators of the now-defunct oil trading firm.
The High Court on Sept 30 also gave the green light to a consent judgment the Lim family reached with HSBC Holdings, which had sued them and Lim Oon Kuin’s personal assistant Serene Seng Hui Choo, for US$85.3 million in damages.
This brings to an end a 50-day civil trial of both cases involving the family of oil tycoon Lim Oon Kuin – also known as O.K. Lim – which had been jointly heard in the High Court.
“This is an important milestone in the liquidation of Hin Leong, and is a victory that belongs to (its) creditors,” said liquidator Goh Thien Phong.
In the judgment reached by both parties, the family will have to pay the sum of US$3.5 billion plus interest at 5.33 per cent per annum – from April 2020 to the date of payment – and costs.
But the Lim family said in written statements on Sept 30 that they do not have enough assets to pay all the claimants that have taken legal action against them and will be applying for bankruptcy.
While the family have consented to the judgment, they are not admitting liability for the allegations against them, which include fraudulent trading and their breach of fiduciary duties as directors.
They were sued in August 2020 to force them to repay the US$3.5 billion debt and US$90 million in dividends they allegedly paid themselves, even though their firm was insolvent.
Hin Leong sustained net losses of about US$808.2 million in futures and swaps trading for the fiscal years from 2010 to 2020, which were concealed in financial statements through fictitious swaps trades, said the liquidators in their opening statements in August 2023.
“The Lim family’s fingerprints are all over this massive body of evidence. O.K. Lim and Evan Lim’s names were stamped as approver and/or transactor on all the fabricated swaps trade tickets,” said the liquidators.
The liquidators were represented by Senior Counsel Cavinder Bull of Drew & Napier. HSBC was represented by Senior Counsel Sarjit Singh Gill of Shook Lin & Bok, while Mr Jaikanth Shankar of Davinder Singh Chambers represented O.K. Lim and Mr Christopher Daniel of Advocatus Law represented Ms Lim.
Sixty-three witnesses had been called in by the liquidators to testify in the civil trial, which was originally scheduled to run for about 180 days. The Lim family were to be called to the stand on Sept 30, but the consent judgment has put an end to the trial.
The court also granted the liquidators an extension on a Mareva injunction to freeze the Lim family’s assets worldwide up to a value of US$3.5 billion. The liquidators will likely proceed with enforcing the judgment against O.K. Lim and his two children.
Justice Philip Jeyaretnam noted in oral remarks that it has been difficult for many of the witnesses who were former employees of Hin Leong to testify in court, pointing out that the Lim family had accused them of keeping the family in the dark about the firm’s affairs before its collapse.
“This difficult experience compounded and aggravated their original difficult experience of having lived and worked through the collapse of Hin Leong,” he said.
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