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Sinfeng appeals against release of Coastal Oil contract docs; China Merchants Bank suspects fraud

22 Jul 2020

A hearing between lawyers representing Sinfeng Marine Services Pte Ltd (Sinfeng) and China Merchants Bank Co., Ltd (CMB) took place at the Court of Appeal in the High Court of the Republic of Singapore on Monday (29 June).

Sinfeng was appealing against a decision made by Justice Tan Siong Thye on 2 September 2019 wherein the Judge granted CMB pre-action discovery of documents sought by the bank to build up its case against Sinfeng, according to documents obtain by Manifold Times from the court.

Defunct Singapore-based bunkering firm Coastal Oil Pte Ltd (Coastal Oil) is a supplier of oil products to Sinfeng.

The latest appeal saw Sinfeng present recent news articles written by local media, which focused on the alleged criminal acts of previous employees of Coastal Oil, to the court.

Sinfeng lawyers claimed former Coastal Oil employees created fictitious sales contracts before submitting them to eight banks which included CMB; in turn leading the bank to believe Coastal Oil had entered into a contract with Sinfeng on credit payment term basis.

“The police investigations do not implicate Sinfeng in the conspiracy,” said Sinfeng’s submission to the court.

“As matters stand, there is no evidence before this Court suggesting that Sinfeng was involved in any alleged conspiracy to defraud CMB; on the contrary, the evidence shows otherwise.”

In response, CMB lawyers noted no findings have yet been made by the Singapore State Court of criminal charges being brought against two of Coastal Oil’s former employees.

Further, the criminal proceedings would, at best, deal only with the 90-Day Contract on credit payment term basis; whereas CMB’s case with Sinfeng relate to a separate cash-in-advance (CIA) Contract.

“To this end, the Bank has shown there are grounds for suspecting the CIA Contract may be a sham / fake contract and/or was not performed,” said CMB’s submission to the court.

“Ultimately, the articles and their brief summary of the criminal charges that refer to the commission of certain offences by CO’s former employees do not assist the Court as they do not shed any light on the CIA Contract and/or Sinfeng’s involvement in the same.”

CMB concludes: “In fact, taken at face value, the said criminal charges referring to a conspiracy and the creation of ‘fictitious sales contracts … to obtain financing from the banks between July 2017 and December 2018’ only adds further to the Bank’s reasonable suspicions. If all of CO’s sales contracts with Sinfeng were fictitious, then the CIA Contract may also not exist.”

A complete coverage of the events leading to the current development has been arranged by Singapore bunker publication Manifold Times (in descending date order) below:

RelatedSingapore: Former Coastal Oil employees face forgery charges over fake sales contracts
RelatedCoastal Oil hearings progress, court grants liquidators access to Sinfeng documents
RelatedChina Merchants Bank legal suit with Sinfeng over alleged $13 million debt progresses
RelatedFraud suspected in Coastal Oil Singapore case, says COSCO
RelatedCoastal Logistics owned “Atalanta”, “Babylon” to undergo auction
RelatedSingapore: Bunker tanker “Coastal Mercury” arrested
RelatedHeng Tong Fuels & Shipping in court over DBS Bank bunker tanker loan
RelatedCoastal Logistics owned MR tanker “Babylon” arrested
RelatedFraud suspected in Coastal Oil Singapore case, says COSCO
RelatedCoastal Oil Singapore: Creditor list surfaces in bunker market
RelatedSingapore: Bunker tanker “Coastal Neptune” arrested
RelatedCoastal Oil Singapore creditors meeting scheduled on 10 Jan
RelatedCoastal Oil Singapore in US $380 million debt to at least 10 banks
RelatedSingapore: Coastal Logistics owned MR tanker “Atalanta” arrested
RelatedHeng Tong Fuels & Shipping, Coastal Logistics tankers enter S&P market
RelatedCoastal Oil Singapore to hold creditors meeting on 28 Dec
RelatedBreaking news: Coastal Oil Singapore under liquidation

Photo credit: Manifold Times
Published: 22 July, 2020

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