Singapore has launched a probe into an oil trading firm that allegedly covered up hundreds of millions of dollars in losses, police said Tuesday.
Hin Leong Trading has been a major force in oil markets for decades and its predicament highlights the fallout from weeks of chaos on crude markets caused by the coronavirus pandemic.
Demand has been strangled as governments around the world scramble to halt the spread of the virus with lockdowns and travel bans, leading to massive falls in oil prices.
The company sought court protection from creditors last week after the price collapse crippled revenues and prompted banks to call in debts, Bloomberg News reported.
But the court filings showed the company, which owes nearly four billion dollars, had concealed about $800 million in losses over the years, the report said.
It said the company’s founder Lim Oon Kuin had ordered the firm to hide the losses incurred from futures trading.
The company also sold some of the fuel it had offered as collateral to secure bank loans, Bloomberg said, quoting documents filed in court.
Singapore police have now launched a probe, confirming in a statement to AFP that “investigations are ongoing”.
Hin Leong did not respond to AFP’s requests for comment.
Oil markets have been hammered in recent weeks as the virus marches round the globe, with US crude falling into negative territory for the first time ever Monday.
Even a deal by top producers to cut output by almost 10 million barrels per day has done little to shore up prices.
According to Forbes, Lim founded Hin Leong in 1963 at age 20 with a single truck delivering diesel to fishermen and small rural power producers.
It has since grown into a behemoth with businesses that include oil trading, storage and marine logistics support.
Forbes said that Lim was no longer a billionaire as of late April “following news that his oil trading company had $800 million in previously undisclosed losses”.