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Banks accuse Singapore commodity trader Agritrade of 'massive' fraud

By Roslan Khasawneh and Anshuman Daga

By Roslan Khasawneh and Anshuman Daga

SINGAPORE (Reuters) - At least 20 banks facing losses running into hundreds of millions of dollars from the collapse of Singapore-based Agritrade International Pte Ltd (AIPL) have accused the commodity trader of fraud, court documents show.

Singapore's High Court appointed an interim judicial manager for the firm last month after rejecting its request for a debt moratorium on $1.55 billion in outstanding liabilities to dozens of creditors, including $983 million owed to secured lenders.

The banks have filed cases in Singapore's high court to recover their money and allege fraud at AIPL, with Singapore's United Overseas Bank (UOB) <UOBH.SI> and Malaysia's Maybank <MBBM.KL> owed nearly $108 million each, documents show.

"There is strong evidence that a massive, premeditated and systematic fraud has been perpetrated by the defendants," Dutch bank ING said in a Feb. 12 affidavit, referring to AIPL's founder, Say Pek Ng, and his son Xinwei Ng, its chief executive.

ING has nearly $100 million in outstanding credit, followed by Japan's MUFG Bank with about $78 million and France's Natixis with $67 million, according to the documents.

All the banks declined to comment to Reuters regarding the cases.

Oon & Bazul LLP, representing AIPL and Xinwei Ng, Marican & Associates, which represents Say Peck Ng, and Agritrade Resources did not immediately respond to requests for comment.

AIPL is the parent company of Hong Kong-listed Agritrade Resources Ltd <1131.HK>.

In court affidavits, Xinwei said AIPL encountered financial problems in 2018, amid a declining commodities market, and its woes were compounded after many banks halted funding.

Xinwei said AIPL hired FTI Consulting (Singapore) Pte Ltd as an independent financial adviser in January to review its financial position, among other matters.

Subsequently it widened the scope of FTI's activities to include investigations into creditors' accusations of fraud.

FTI issued an interim report saying it had "uncovered significant fraudulent activities which includes the provision of duplicate bills of lading to multiple financiers," Xinwei told the court.

FTI declined to comment to Reuters on the report.

Responding to fraud allegations against AIPL, Xinwei he managed the day-to-day business of Agritrade Resources and its subsidiaries, while his father was in charge of AIPL's trading business.

"I will fully support the IFA, police and the lawyers to fully uncover the degree of the fraud and do whatever is needed to trace and recover the monies which has been obtained from the lenders," Xinwei said in the documents.

Xinwei said AIPL terminated the elder Ng's employment on Feb. 1, after which the latter resigned.

Xinwei told creditors of this development at their meetings, he added.

"My father suddenly left us and flew out of Singapore on or around December 21, 2019. I understand that he went to China. I do not know if he intends to return to Singapore."


(Reporting by Roslan Khasawneh and Anshuman Daga; Additional reporting by Jessica Jaganathan; Editing by Florence Tan and Clarence Fernandez)