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Argus Media: Hontop Energy fraud allegations add to Singapore trading woes

BP told CIMB[…] that the purported contracts between it and Hontop appeared to be ‘fabrications’ and CIMB is ‘apparently a victim of Hontop’s fraudulent conduct’.

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Kevin Foster of global energy and commodity price reporting agency Argus Media on Tuesday (7 July) published an article outlining details of Malaysian Bank CIMB’s court filing accusing Hontop Energy (trading arm of Chinese independent refiner China Wanda Holding Group Co Ltd) of fraudulent transactions: 

More details are emerging about the collapse of Singapore-based Hontop Energy earlier this year, adding to pressure on the country's embattled commodity trading sector.

Malaysian bank CIMB filed an application to the Singapore high court last week for trading company Hontop to be placed under judicial management — a form of debt restructuring. CIMB provided trade financing to Hontop for crude and products cargoes, court documents show.

Hontop is one of four Singapore-based trading companies to have collapsed this year, together with oil traders Hin Leong and Zenrock and coal trading firm Agritrade. Hontop, which went into receivership in February, is fully owned by Chinese private-sector firm Wanda whose group assets include the 100,000 b/d Tianhong independent refinery in Shandong province.

Hontop blamed its problems on the impact of the Covid-19 pandemic on Chinese oil demand, as well as moves by banks to tighten credit lines to Chinese independent refineries following a default by a large copper smelter, Fangyuan, in December. It had outstanding liabilities of around USD 473mn to banks and about USD 60mn to other unsecured creditors as of the end of February, according to a filing for court protection that was made in early March and included in the CIMB court documents.

Suspicious transactions

Hontop laid out a plan to restructure its debts as part of the filing. But CIMB, which the court records show is Hontop's biggest creditor at USD 105mn, said it has a "complete loss of confidence" in the company's management. It accused Hontop of engaging in "suspicious transactions" involving two cargoes of Russian ESPO Blend crude late last year, the court documents show. Both cargoes were bought from Singapore trading firm Sugih Energy, now known as Aeternum Energy, and sold to BP.

The first cargo, of around 476,000 bl, was shipped on the Aframax tanker Green Attitude to Yosu in South Korea, while a second 1mn bl cargo was shipped on the very-large crude carrier Gem No.5 to Shandong. CIMB issued letters of credit (LCs) to Hontop for both transactions.

CIMB paid Sugih under the LC for the first cargo, but after approaching BP to collect payment was told that the cargo was subject to a separate framework agreement between BP and Hontop. BP said it had not received payment from Hontop and so was not obliged to pay CIMB for the cargo, according to the court filing.

CIMB also provided financing for the second cargo. BP later informed CIMB that it had not entered into any contract with Hontop for the cargo and so was not required to make payment.

BP told CIMB through its solicitors in March that the purported contracts between it and Hontop appeared to be "fabrications" and that CIMB is "apparently a victim of Hontop's fraudulent conduct", according to a letter included in the court filing.

BP declined to comment. CIMB did not reply to a request for comment, while Hontop could not be reached.

Fraud allegations

The allegations against Hontop mean that all three of the Singapore oil trading companies that have collapsed so far in 2020 have now been accused in court documents of fraudulent activity relating to cargo financing.

Hin Leong overstated the quantity of inventory on board vessels when obtaining inventory financing, and secured financing by pledging cargoes that it did not own or did not exist, according to a court filing last month by its judicial manager PricewaterhouseCoopers. The company also concealed derivatives trading losses of over $800mn in the past 10 years, the filing shows.

UK bank HSBC has accused Zenrock of dishonestly obtaining multiple sources of financing for crude cargoes, according to a separate court filing.

Bank losses

The details in the Hontop court filing also take to around USD 4bn the amount that banks and other creditors stand to lose as a result of the company collapses. China's Citic Bank and France's Natixis and Societe Generale are the next-biggest creditors to Hontop, at USD 82mn, USD 81mn and USD63mn respectively, according to the court filing.

Banks are on the hook for the majority of the USD 3.5bn that Hin Leong owes to its creditors, while Zenrock owes around USD 165mn to lenders.

Dutch bank ABN Amro booked an impairment charge of EUR 225mn (USD 253mn) related to Hin Leong in May and warned that it was not confident of recovering its losses.

Singapore banks said this month they are working with the government to review financing standards for the commodity sector.


Source and photo credit:
Argus Media
Published: 8 July, 2020

 

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Winding up

Singapore: Notice of preferential dividend issued for Asia-Pacific Shipyard

Creditors will need to submit proofs to liquidators of Asia-Pacific Shipyard Pte Ltd by 6 February, according to a Government Gazette notice.

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RESIZED Drew Beamer

A notice of preferential dividend for Otto Marine Limited, which is in liquidation, was published on the Government Gazette on Friday (9 September). 

The following are details of the notice:

Name of Company : Asia-Pacific Shipyard Pte Ltd (In Creditors’ Voluntary Liquidation)
Unique Entity No./Registration No. : 197300183MAddress of Registered Office : 8 Wilkie Road, #03-08 Wilkie Edge, Singapore 228095

Last Day for Receiving Proofs : 6 February 2025

Name of Liquidators : Ng Kian Kiat and Yap Hui Li

Address of Liquidators : c/o RSM SG Corporate Advisory Pte. Ltd., 8 Wilkie Road #03-08, Wilkie Edge, Singapore 228095

 

Photo credit: Drew Beamer
Published: 24 January, 2024

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Winding up

Singapore: Liquidator of Vanda Marine Services issues notice of dividend

First and final dividend of company is payable from 23 January at Rock Stevenson Pte Ltd, 8 Burn Road, Trivex #16-12, Singapore 369977, according to Government Gazette notice.

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calculator steve pb from Pixabay

A notice was published in the Government Gazette on Thursday (22 January) regarding the first and final dividend to creditors of Vanda Marine Services Pte Ltd.

The following are details of the notice of dividend of the company:

Name of Company : Vanda Marine Services Pte Ltd(In Creditors’ Voluntary Liquidation)

Unique Entity No. / Registration No. : 201209660C

Address of Registered Office : 8 Burn Road, Trivex #16-12, Singapore 369977

Amount per centum : 23 per centum of all admitted ordinary claims

First and Final or otherwise : First and Final

When payable : 23 January 2025 onwards

Where payable : c/o Rock Stevenson Pte Ltd, 8 Burn Road, Trivex #16-12, Singapore 369977

Manifold Times previously reported several resolutions for Vanda Marine Services, including winding up the company voluntarily, were passed during an extraordinary meeting in March last year.

Related: Singapore: Vanda Marine Services liquidator issues notice of intended dividend
Related: Singapore: Liquidators arrange creditors meeting for Vanda Marine Services
Related: Singapore: Vanda Marine Services undergoes voluntary liquidation

 

Photo credit: steve pb from Pixabay
Published: 23 January, 2025

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Bunker Fuel

MPA: Sentek Marine & Trading bunkering licenses to expire on 3 February

Sentek will cease to be licensed from 3 February 2025 at 4pm and must not continue to operate as a bunker supplier and bunker craft operator within the Singapore Port, says MPA.

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RESIZED bunker tanker singapore

The Maritime and Port Authority of Singapore (MPA) on Monday (20 January) said the bunker supplier and bunker craft operator licences of Sentek Marine & Trading Pte Ltd (Sentek) will expire at 4pm on 3 February 2025.

“From 3 February 2025, 4pm, Sentek Marine & Trading Pte Ltd will cease to be licensed and must not continue to operate as a bunker supplier and/or bunker craft operator within the Singapore Port,” MPA said in Port Marine Circular No 2 of 2025. 

On 4 September 2024, MPA initially said it would not be renewing the bunkering licences of Sentek, which would expire on 17 September and the company would cease to be licensed on and from 18 September. 

However, later, MPA announced it has extended the bunkering licences of Sentek for a limited amount of time, “pending the final disposal of the appeals” by the company.

In late August last year, Manifold Times reported the General Division of the High Court dismissing an application from Sentek to quash MPA’s refusal to renew its bunker supplier and bunker craft operator licenses.

At the time, a Sentek representative told Manifold Times it was planning to appeal the High Court decision.

MPA also reminded all bunker licensees, including bunker suppliers and bunker craft operators, to comply strictly with all the terms and conditions of the respective bunker licence(s). 

“MPA will not hesitate to take firm action against any licensee that contravenes any of its bunker licence terms and conditions, including taking into account such contraventions in considering whether to renew the bunker licence(s), suspending or cancelling the bunker licence(s), and/or taking enforcement action against any such bunker licensee,” it said.

Related: Singapore: Sentek Marine & Trading secures temporary extension of bunker licences
Related: MPA: Sentek Marine & Trading bunkering licenses to cease from 18 September
Related: Singapore: Sentek application to quash MPA’s refusal to renew bunkering licences dismissed

 

Photo credit: Manifold Times
Published: 21 January, 2025

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