Two weeks after it was announced that trading house Hin Leong’s bunkering arm Ocean Bunkering Services had ceased supplies, two newcomers have taken its place
Singapore Maritime and Port Authority (MPA) had two bunker companies waiting in the wings to take up licences in the wake of Ocean Bunkering Services’ (OBS) demise. TFG Marine and Minerva Trading are the latest companies to join the list of 45 approved bunker companies trading in the region. These companies will have to comply with MPA’s strict regulations on mass flow meters and they will be under scrutiny from established rivals looking for a slice of OBS’ custom.
The collapse of OBS is still under investigation but the founder of Hin Leong Trading, O K Lim has already submitted that he took steps to hide US$800M in future trading losses from being reported.
This is the latest in a long line of scandals to hit the Singapore bunker scene, as reported by counter-party intelligence specialist Infospectrum. Each time, the Singapore authorities try to close the gap in the financial reporting that allows such tactics and it will be particularly embarrassing if futures trading is the cause.
Failed futures positions in a subsidiary in Singapore was the catalyst for the collapse of OW Bunker & Trading in 2014, which also exposed the loose legal wording then commonly used in bunker contracts. This also raises the spectre of Hin Leong creditors claiming liens on fuel supplied by OBS and arresting vessels.
PricewaterhouseCoopers has been appointed judicial interim managers of Hin Leong Trading and its financial forensic accountants will be unravelling how a company that publicly reported a revenue of US$20Bn for its 2019 financial year could collapse so quickly. One issue is that this supposedly US$20Bn-revenue earning company was allowed to file accounts with the Singapore authorities under the exempt private company ruling. These gave no information on the size of the company’s assets versus its liabilities. It has since emerged that the company’s assets were only US$714M versus liabilities of US$4Bn.
There is no news yet on the fate of the Ocean Tanker Pte fleet, which includes a flotilla of bunker barges said to make up around 15% of the Singapore fleet.
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