OCBC put the Lim family's Xihe Holdings under judicial management over $208M transfer

On July 20, 2020, OCBC Bank applied to Singapore's High Court for interim judicial managers from Grant Thornton to take over Xihe Holdings, the Lim family's tanker group, and four vessel-owning subsidiaries — Da Xin Tankers, Hua Guang Shipping, Nan King Maritime and Hua Xin Shipping. The bank said it 'strongly distrusts (their) current management' after court documents showed the Xihe group had transferred US$208.1 million (S$288 million) to troubled oil trader Hin Leong 'for no valid commercial purpose'.

The same family controlled the interlocked Hin Leong and Ocean Tankers, whose founder Lim Oon Kuin admitted directing the firm to hide about US$800 million in futures trading losses; OCBC's filing accused the Lims of fabricating fictitious gains, forging documents on a massive scale, concealing losses, misusing secured inventory and misleading banks. The family paid itself US$30 million in dividends in 2017 and US$60 million in 2018 from Hin Leong despite no profits, and withdrew US$19 million from Ocean Tankers shortly before its debt moratorium filing.

OCBC also cited irregularities inside Xihe itself: bare-boat charters of OCBC-financed vessels terminated without the bank's consent, and months- or years-long failures to collect payments from Ocean Tankers, whose potential claims reached US$2.67 billion. Hin Leong and Ocean Tankers had sought a six-month moratorium on more than US$3.6 billion owed to 23 banks, then withdrew it and sought judicial management themselves — leaving Xihe's vessels exposed to mounting arrest risk daily.

The US$208.1 million transfer to the failing trader had no documented commercial purpose and prejudiced Xihe's own creditors.

Charters on bank-financed vessels were cancelled without OCBC's consent, breaching contractual obligations to the bank.

Common ownership and leadership meant Xihe's management might have been privy to Hin Leong's misreporting and inventory misuse.

With fraud claims mounting across the group, independent managers were seen as the only way to restore counterparty confidence.

In a family empire, one affiliate's fraud contaminates every sibling: creditors will move to remove management across the group, not just at the company that failed.

The court was asked to appoint Seshadri Rajagopalan and Paresh Jotangia of Grant Thornton Singapore as interim judicial managers urgently, to investigate the irregularities, prevent further prejudice to creditors and reduce the daily risk of vessel arrests; Hin Leong and Ocean Tankers' billion-dollar insolvencies continued to unfold in parallel.