Hong Kong-listed COSCO SHIPPING International (Hong Kong) Co., Ltd (COSCO), says its indirect wholly-owned bunkering subsidiary Sinfeng Marine Services Pte. Ltd. (Sinfeng) suspects fraud to be involved in the recent liquidation of Coastal Oil Singapore Pte Ltd.
Sinfeng is principally engaged in the supply and trading of marine fuel and related products with business network covering major oil ports such as Singapore and Malaysia.
“Based on a preliminary assessment, the management of Sinfeng is of the view that the documents in relation to almost all of the alleged debts are not genuine,” it stated in a recent filing.
COSCO notes a number of third party commercial banks have alleged to Sinfeng that Coastal Oil Singapore has assigned to the banks receivables due and/or which would fall due from Sinfeng to Coastal Oil Singapore.
Pursuant to the alleged assignment of the alleged debts by Coastal Oil Singapore to the banks, the banks have demanded for repayment of the alleged debts by Sinfeng.
Sinfeng is still in the process of conducting an investigation and seeking professional advice.
For the year ended 31 December 2017 and the six months ended 30 June 2018, the purchase costs from Coastal Oil Singapore by Sinfeng represented approximately 94% and 93% of the total purchase costs of Sinfeng for the same period, respectively.
“The management of Sinfeng has been using its best endeavours to identify alternative suppliers to Coastal Oil Singapore and will conduct a review of the business operations of Sinfeng, taking into account various factors, including but not limited to the profitability of Sinfeng, the portfolio of customers and the developments of the Investigation,” said COSCO.
“The board expects that the revenue of the group will decrease significantly unless and until alternative suppliers to Coastal Oil Singapore are identified.
“However, in light of the insignificant profit contribution of Sinfeng, the board currently does not foresee any material adverse impact on the group as a result of the liquidation of Coastal Oil Singapore.”
Moving forward, COSCO notes additional time is required for completing the investigation due to the “voluminous” amount of information and documents.
Related: Coastal Oil Singapore: Creditor list surfaces in bunker market
Related: Coastal Oil Singapore in US $380 million debt to at least 10 banks
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Related: Coastal Oil Singapore to hold creditors meeting on 28 Dec
Related: Breaking news: Coastal Oil Singapore under liquidation
Published: 8 January, 2019
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