SINGAPORE (Reuters) – HSBC Holdings PLC <HSBA.L> has alleged that Singapore-based Zenrock Commodities Trading Pte Ltd engaged in a series of “highly dishonest transactions” which included using the same oil cargo to obtain loans from at least two different lenders, according to a court document seen by Reuters.
Zenrock did not immediately respond to requests for comments.
HSBC filed a court application on Monday to place Zenrock Commodities under judicial management, where a court appoints an independent manager to run the affairs of a financially distressed company in the place of existing management.
The case will be heard in Singapore’s High Court on Friday, according to the Supreme Court’s website.
The bank said in the court filing that Zenrock Commodities has “behaved fraudulently, and engaged in double/multiple financing” in two separate crude oil transactions that occurred in March and April.
Zenrock Commodities “wrongfully diverted payment of funds” which should have been paid directly to HSBC, the bank added.
Zenrock Commodities owed HSBC close to $49 million while its total debt to institutional lenders stands at around $165 million, HSBC said.
HSBC and its law firm Shook Lin & Bok did not immediately respond to requests for comments.
Zenrock is the latest Singapore-based commodities trading firm whose finances have come under scrutiny as the collapse in global oil prices amid a slump in consumption due to the coronavirus pandemic ripples through the sector.
Late last month, the company issued a statement to reassure clients that it was not under financial duress after global oil and fuel prices slumped.
Zenrock trades crude, oil products and petrochemicals and has offices in Singapore, Shanghai and Geneva.
(Reporting by Roslan Khasawneh, Anshuman Daga and Jessica Jaganathan; Writing by Florence Tan; Editing by Michael Perry)