ICICI Bank , on April 21, has confirmed that it has exposure to Singapore based Hin Leong Trading Pte, a top oil trading firm that is in the dock for its alleged failure to disclose hundreds of millions of dollars in losses over several years. Moneycontrol first reported this story on April 20.
The bank, however, has not specified the exact amount of exposure.
“We confirm that the Bank, in the normal course of its business, has exposure to the borrower group in question, is taking due steps to protect its interests, and will appropriately reflect the same in its financial statements, as it would do in respect of all its banking exposures,” said ICICI Bank in a filing to stock exchanges.
On April 20, Moneycontrol reported that ICICI Bank has an exposure of $100 million (about Rs 760 crore) to Hin Leong.
Reuters reported after reviewing a court filing that the founder and director of Hin Leong Trading Pte (HLT), Asia's largest oil trader, had directed the firm not to disclose these losses. The affidavit signed by one Lim Oon Kuin, a Singaporean national, is a part of a April 17 filing to the Singapore High Court by HLT and subsidiary Ocean Tankers (Pte), seeking a six-month moratorium on debts of $3.85 billion to 23 banks, the news agency reported.
Besides ICICI Bank, other lenders with exposure to HLT include HSBC, ABN Amro, DBS Bank, Societe Generale, Bank of China, among others.
Separately, Reuters reported citing an anonymous ICICI Bank source that the Indian lender is seeking the impounding of two vessels operated by Ocean Tankers (Pte).
Shares of ICICI Bank were trading 8 percent down at Rs331.40 at the time of filing this copy.
The court filing cites a collapse in the oil price and the coronavirus pandemic, which has hammered oil demand and pushed up costs for HLT, one of Asia’s largest oil traders. Despite reporting net profit of $78.2 million for the business year ended in October, “HLT has not been earning profits over the last few years,” Lim said in the filing, which has not been made public.
HLT is reeling under heavy debts of some $3 billion and is also bearing the brunt of a cutthroat price war among the big oil producing states.
(This is an updated version of an earlier story, after incorporating ICICI Bank’s exchange filing)