Hin Leong founder O.K. Lim gets 17½ years’ jail for cheating, forgery

Hin Leong founder Lim Oon Kuin was sentenced to 17 years and six months’ jail on three charges of cheating and forgery, in what prosecutors described as “one of the most serious cases of trade financing fraud that have ever been prosecuted in Singapore”.

He will be appealing against the conviction and sentences imposed, and his bail of $4 million has been extended.

State Courts judge Toh Han Li, in a 68-page oral decision delivered on Nov 18, found that “an aggregate sentence of 17 years, six months’ imprisonment accords with the criminality of (Lim’s) offences and is not crushing”.

In determining the extent of harm done, the judge considered the amount of monies cheated, whether Lim’s offences affected Singapore’s financial services, and could have potentially undermined public confidence in Singapore’s oil industry.

The prosecution on Oct 15 sought a maximum sentence of 20 years for the 82-year-old better known as O.K. Lim, whose offences “affected the delivery of financial services in Singapore, and tarnished Singapore’s hard-earned reputation as Asia’s leading oil trading hub”.

Following a 62-day criminal trial, Lim, a legend in Singapore’s oil industry, was convicted in May of two cheating charges and one count of instigating forgery for the purpose of cheating.

The former oil tycoon was found guilty of cheating HSBC through employees of his “family business”, by claiming that Hin Leong had entered into two contracts to sell oil to China Aviation Oil (Singapore) and Unipec Singapore, and then applying for discounting of these purported transactions.

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

As a result, the bank was deceived into disbursing US$111.6 million (S$150 million) to Hin Leong, of which US$85 million remains its total outstanding loss.

The judge noted that these were “staggeringly large sums of monies relative to other cheating cases which have come before our courts”.

He also found that a deterrent sentence is warranted “to prevent offences from pervading Singapore’s financial ecosystem, which may lead to banks imposing stricter rules of compliance or withdrawing their trade financing services entirely”.

“In my judgment, (Lim’s) offences would have the potential to impact the bunkering and oil trading sector as Hin Leong was one of the largest players in the industry,” he added.

In determining Lim’s culpability, the judge found that Lim’s motive for committing the offences was “not for personal greed, but to improve Hin Leong’s cash flow situation and to stave off margin calls”.

But he found that “there was premeditation and planning on (Lim’s) part”.

The judge also agreed with the prosecution that the offences were “difficult to detect as banks and financial institutions had to rely on the information provided by the applicant in financing applications... As these were silent discounting transactions, the buyers, China Aviation Oil and Unipec, would not have been informed of the discounting transactions”.

“For the trade financing system to work efficiently, financial institutions such as HSBC should be able to assume that the documents submitted for discounting were genuine and should not need to investigate if they were in fact forgeries,” the judge pointed out.

But the judge gave an aggregate reduction of one year’s imprisonment “on account of (Lim’s) old age” after considering “the long aggregate sentence to be imposed, but balancing this against the gravity of the offences, the need for deterrence for the offences committed and the fact that he was still able to commit the offences when he was already 78 years old”.

He did not give further reduction on account of Lim’s medical conditions.

“In my view, Singapore Prisons Service’s response on the specific housing facilities does take into account and cater to (Lim’s) medical conditions, and this means that it has the capability to address (Lim’s) medical conditions to an acceptable standard, even if it may not be the best medical standard,” the judge said. 

Deputy Chief Prosecutor Christopher Ong said Lim’s two cheating charges are “examples of the worst possible offences of cheating” and warrant a sentence of 10 years’ jail per charge, while the forgery charge warrants a sentence of nine years’ imprisonment. The prosecution had asked for the two cheating sentences to run consecutively for a total of 20 years.

On Sept 30, Lim and his two children, Evan Lim Chee Meng and Lim Huey Ching, agreed to pay US$3.5 billion to the liquidators of the now-defunct oil trading firm.

But the Lim family said in written statements that day that they do not have enough assets to pay the claimants and will be applying for bankruptcy.

A High Court hearing has been scheduled on Nov 26 to hear the family’s bankruptcy applications.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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