May 8, 2020
HSBC accuses collapsed oil trader ZenRock of ‘suspicious’ dealings
HSBC's bid to remove the management of collapsed energy trader ZenRock Commodities Trading was triggered by concerns about alleged "Dishonest practices" and "Shams", which the bank has also reported to police in Singapore, court documents say. ZenRock's debt to institutional lenders stands at about $214m, of which almost $49m is owed to HSBC. In court documents supporting its application, seen by the Financial Times, HSBC alleged that ZenRock issued duplicate commercial invoices with different payment instructions to raise financing from lenders for the same cargo of oil. In one of the transactions cited by HSBC, ZenRock is said to have used a letter of credit to finance the purchase of 920,000 barrels of crude from Socar, the state oil company of Azerbaijan, which - according to the court filing - it planned to sell on to the trading arm of France's Total. The money never arrived and HSBC later discovered it had been transferred by Total to the Bank of China on the instruction of ZenRock in order to pay off another loan. The move by HSBC to seek judicial management - a type of debt restructuring - of ZenRock by accounting firm KPMG illustrates how banks have increased their scrutiny of Singapore's oil industry after a string of high-profile corporate blow-ups in the city-state.
Related companies
Make a complaint about HSBC by viewing their customer service contacts.
