Singapore: judgement. File Image / Pixabay
A bank's attempt to retrieve the funds in a letter of credit issued to the collapsed of oil trader Hin Leong has failed.
Unicredit issued the letter of credit for $37 million to Hin Leong for the purchase of 150,000 metric tonnes of high sulfur fuel oil from Glencore. This purchase was a buyback transaction where the seller simultaneously buys back the goods sold from the buyer. The transaction was made five months before Hin Leong went bust.
In a case brought before the Supreme Court in Singapore, the bank alledged that fraud had occurred. But the court saw differently.
The court found that the transaction involving the letter of credit was sound and that the bank's assertion of fraud groundless, according to court documents.
The Hin Leong companies were wound up earlier this year.