Singapore police have charged a former Agritrade executive with deceiving Shanghai Pudong Development Bank (SPD Bank) into paying out nearly US$20mn based on invalid bills of lading.
Lim Beng Kim Lulu, previously chief financial officer at Singapore-headquartered commodities trader Agritrade, faces charges of “cheating and dishonestly inducing a delivery of property”, according to an announcement by the city state’s police force this week.
Lulu Lim is accused of deceiving SPD Bank into disbursing US$19.9mn to a supplier of Agritrade International – now in liquidation following its sudden collapse last year – on the basis of 19 bills of lading that were presented as “legally and validly pledged in the bank’s favour”.
Police say Lulu Lim faces up to 10 years’ imprisonment and a fine, with investigations still ongoing into allegations of fraud at the trading house.
After its collapse in February last year, Agritrade was accused of “massive, premeditated and systemic” deception by banks. At the time of its downfall, the trader owed more than US$1.5bn to creditors, including US$983mn to secured lenders.
It was placed into judicial management before being served with a compulsory winding up order by three creditors – ING Bank, Natixis and Commerzbank – which were owed a combined total of over US$200mn.
Other major creditors included UOB, MUFG and Maybank, court documents showed. Agritrade also drew financing from since-collapsed supply chain finance firm Greensill.
The case ended up being the first in a string of fraud scandals to hit Singapore’s commodity finance sector.
Just weeks afterwards, Hin Leong – one of Asia’s largest independent trading houses – revealed it had suffered US$800mn in undisclosed losses and had already sold off inventory pledged as collateral.
Judicial managers later revealed the company had become dependent on raising financing against forged bills of lading, a desperate attempt to cover up vast accumulated losses that was described as a “vicious cycle” of fraud that operated like a Ponzi scheme.
The police action against Lulu Lim is only the second time criminal charges for cheating have been brought on the basis of invalid bills of lading.
In June, the Singapore Police Force brought 105 new charges against Hin Leong founder Lim Oon Kuin – in addition to 25 previous charges – including one that related to a bill of lading showing around 500,000 barrels of gasoil had purportedly been loaded onto a vessel in March 2020.
Lim was also charged with deceiving eight financial institutions into providing receivables financing of US$1.2bn based on oil sales to Unipec Singapore, and was accused of procuring dozens of forged certificates of quality and obtaining letters of credit where there was no underlying cargo.
At the time, five financial institutions were still owed around US$235mn from those transactions, police said.
Agritrade’s Lulu Lim and SPD Bank could not be reached for comment.