A Singapore commodities firm, Agritrade International Pte (Agritrade) has been accused of fraud by lenders, including ING Bank NV after Agritrade defaulted on its debt and so the financiers had to face potential losses of hundreds of millions of dollars in liabilities.
In a filing to a Singapore court on 12 Feb by ING Bank, Agritrade’s Chief Executive Officer, Ng Xinwei and his father Ng Say Peck allegedly misrepresented the company’s financial position to various bank creditors.
Officials from Agritrade have refrained from commenting. In a 10 Feb court ruling, Mr Ng noted that banks including Natixis SA and MUFG Bank Ltd had filed the allegations of fraud committed by Agritrade “and/or its directors”. According to Mr Ng’s lawyer, nothing linked him to fraud. Mr Ng’s father could not be contacted for comment.
Based on the filing by ING Bank, a total of US$1.5 billion (S$ 2.08 billion) of liabilities are held by a group of 15 lenders including ING, Commerzbank AG, Malayan Banking Bhd (Maybank), MUFG Bank and Natixis.
The amounts held by ING and MUFG are US$96.9 million (S$134.69 million) and US$77.3 million (S$107.44 million) each, whereas Maybank held US$107.6 million (S$149.56 million), as stated in ING’s filing on 12 Feb.
According to ING, multiple “overlapping” bills of lading, or lists of shipment goods had been allegedly issued by Agritrade to acquire financing from multiple lenders for the same shipment. With the help of a coal specialist, Commerzbank believes that its shipments of coal did not exist, as reported in the filing.
Commerzbank, Natixis, ING and MUFG have refused to comment. Similarly, Maybank stated that it cannot comment on specific clients as it has “a stringent provisioning policy in place and takes appropriate measures as and when required to manage the asset quality of our entire credit portfolio.”
In the 12 Feb court filing by ING, it highlighted that this current financial predicament is a result of “a massive and pre-meditated fraud” allegedly committed by Mr Ng and his father who started the business.
According to the lawyer representing Mr Ng, Bazul Ashhab, his client “has never been involved” in Agritrade’s trading business, which was run by his client’s father.
Mr Ng immediately took measures to broaden the scope of an independent financial adviser’s role in conducting investigations, when the fraud allegations began. All this suggests that “there is nothing that links Mr. Ng Xinwei to the fraud perpetuated” against Agritrade International, his lawyer stated by email.
In February, Mr Ng’s father resigned as chairman of the Hong Kong-listed Agritrade Resources. Agritrade Resources sought for comments by email, but no reply came from him. A Bloomberg reporter also visited his house in Singapore but he was not at home, and so the reporter left a note asking for comment on the allegations. No reply has come back.
Based on the 10 Feb court filing, Mr Ng remarked that his father had left Singapore around 21 Dec last year to go to China, and he did not know if his father intended to come back to Singapore.
An application by Agritrade for moratorium against lenders taking action was dismissed by a Singapore court, and interim judicial managers have been appointed over the company. Following this, Mr Ng is helping the managers, as the director still, to negotiate a proposal from an investor to repay its lenders and inject funds, as stated by Ng’s lawyer.
Agritrade and Mr Ng also allegedly failed to disclose a raid conducted on 15 Jan by the Singapore’s Commercial Affairs Department of Agritrade’s office, according to ING Bank.
“[It is] inappropriate to comment on ongoing investigations,” a spokesperson from the department finally said.