Malaysia’s CIMB alleges ‘suspicious’ Hontop Energy oil deals with BP

A woman wearing a facemask as preventive measure against the spread of the coronavirus (COVID-19) walks at the business district in Singapore. (AFP)
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Updated 06 July 2020

Malaysia’s CIMB alleges ‘suspicious’ Hontop Energy oil deals with BP

  • Hontop is one of four commodity trading firms in Singapore which ran into financial trouble as the oil price crashed

SINGAPORE: Singapore’s High Court has appointed an independent supervisor to oversee the restructuring of trader Hontop Energy.

The move came after Malaysian lender CIMB, its biggest creditor, raised concerns about what it described as “suspicious” deals involving oil major BP, according to an affidavit filed with the court this week.

Hontop, the trading arm of Chinese independent refiner China Wanda Holding Group Co. Ltd., is one of four commodity trading firms in Singapore which ran into financial trouble as the oil price crashed. CIMB is seeking repayment of $105 million it lent the company.

In the affidavit requesting the appointment of an independent supervisor to run Hontop’s affairs, CIMB Bank Berhad detailed how it lent Hontop the money to finance two crude oil deals late last year in a section titled “Suspicious transactions.” In total, Hintop owes nearly $470 million to seven banks, according to a list of creditors included in the affidavit.

Accounting firm RSM Corporate Advisory Pte Ltd. has been named interim judicial managers following the bank’s application, according to CIMB’s law firm Rajah & Tann and the affidavit. CIMB said it does not disclose or comment on specific names or clients. 

The deals cited by CIMB in its affidavit involved Hontop buying cargoes from Sugih Energy International Pte Ltd., now known as Aeturnum Energy International Pte Ltd, and telling CIMB it was reselling them to BP Singapore Pte Ltd. (BPS), a unit of BP.

Focus Law Asia LLC, representing Aeternum Energy, confirmed the transactions with Hontop.

In the first deal, CIMB agreed to finance Hontop’s sale of Russian ESPO crude onboard vessel Green Attitude to BP on an “open account” basis, where goods are shipped and delivered before payment is due, according to the affidavit.

When CIMB reached out to BP for payment in February, the oil major told the bank that the contract and payment for the cargo had been subject to a separate agreement between BP and Hontop and because it had not received payment from Hontop it was not obliged to pay Hontop or CIMB for the cargo, according to the affidavit.

BP did not specify what the agreement was about or say why it was meant to receive a payment from Hontop.

“It appears to be the case that, when applying for financing, Hontop neglected to disclose to CIMB material details about the nature of its agreement with BP,” BP said in a Feb. 20 letter to CIMB, a copy of which was appended to the affidavit.

In the second deal, for 1 million barrels of Russian Export Blend crude onboard vessel Gem No. 5, BP told CIMB in January that it did not enter into any contracts relating to this cargo.


Virus sees Booking.com slash quarter of global staff

Updated 04 August 2020

Virus sees Booking.com slash quarter of global staff

  • The company warned that “up to 25 percent” of employees could go in what it called an “extremely difficult step”
  • Booking.com’s Amsterdam headquarters was expected to be among the sites affected

THE HAGUE: Online travel agency Booking.com said Tuesday it will cut up to a quarter of staff worldwide due to the ongoing coronavirus pandemic, leading to thousands of job losses.
The Amsterdam-based booking site, which employs around 17,500 people around the world, declined to give an exact number of posts that will be slashed, saying details would become clearer “in the coming weeks and months.”
But it warned that “up to 25 percent” of employees could go in what it called an “extremely difficult step.”
“The Covid-19 crisis has devastated the travel industry, and we continue to feel the impact as travel volumes remain significantly reduced,” the company said in a statement sent to AFP.
“While we have done much to save as many jobs as possible, we believe we must restructure our organization to match our expectation of the future of travel,” it added.
Booking.com’s Amsterdam headquarters was expected to be among the sites affected, Dutch media reports added.
Hard-hit by the slowdown in international travel resulting from the lockdown, Booking.com follows in the footsteps of other digital travel sites such as Airbnb and TripAdviser, which have also laid off around 25 percent of their workforce.
Booking.com applied in April for state support.
Last month it received some 61 million euros ($71.8 million) from the Dutch state, making it the third-largest recipient of support behind flagship airline KLM and Dutch Rail (NS), the ANP national news agency reported.
Founded in 1996, Booking.com has some 28 million listings on its website which is available in 43 languages.