In the latest dispute, the Singapore branch of CIMB alleges that Hontop, which is wholly-owned by China’s Wanda Holding Group Co., conducted “suspicious” trades involving two Russian oil cargoes that the bank had financed, according to a Singapore court document seen by Bloomberg.
CIMB asked the Singapore High Court to appoint an interim manager, which is a form of corporate restructuring, and is seeking about US$105 million ($146.4 million) from Hontop and Wanda. The trader’s total outstanding liabilities were US$473 million as of late-February, according to the document.
Hontop is represented by TSMP Law Corporation, while CIMB is represented by Rajah & Tann Singapore LLP. Nobody answered calls to Hontop. Rajah & Tann, TSMP and CIMB declined to comment on the matter.
CIMB singled out in the court document two suspicious so-called back-to-back oil deals. The arrangement involved Hontop buying a cargo from one trader, Sugih Energy International Pte Ltd, and then selling it on to a unit of BP Plc in Singapore.
In one of those deals, CIMB issued a letter of credit to Sugih – now known as Aeturnum Energy International Pte. – and paid for the cargo on Honhop’s behalf. BP then informed CIMB that its payment was conditional upon a separate payment it was expecting first from Hontop, which had never been disclosed to the bank, according to the document.
BP declined to comment.
In the most high-profile fallout in Asia’s oil-trading hub this year, banks including HSBC Holdings Plc are seeking to recover hefty losses from the collapse of Hin Leong Trading (Pte) Ltd., which overstated assets by US$3 billion and fabricated documents on a “massive scale.” Other firms caught out in the downturn include ZenRock Commodities Trading Pte Ltd., which is planning to wind down by August, and Agritrade International Pte.
See: Singapore oil trader ZenRock says it plans to wind down business by August
