Lenders face US$9bil credit hit

Hin Leong Trading, founded in 1963 by Lim Oon Kuin, is seeking Singapore court protection from its lenders. - Business Times/ST

SINGAPORE: When Credit Agricole SA and HSBC Holdings Plc issued a payment guarantee for a US$76.5mil fuel purchase from a Singapore trader in March, they unwittingly became the latest victims in a series of trade finance scandals that have led to more than US$9bil in potential losses for global lenders.

At the same time that Hin Leong Trading Pte was pledging the fuel to back the loan, it allegedly agreed to sell the same cargo to another trader, who sought letters of credit from three banks including Credit Agricole.