As New Ship Management Partnership Begins Shadows Fall on Singapore Group

SINGAPORE – The Xihe Group, which owns 136 vessels, ranging from small harbour tugs to VLCCs that spans the entire spectrum of the oil tanker market, has appointed V.Group, a global provider of ship management and marine services as the technical manager for 16 of its modern tankers.

The vessels are currently anchored off Singapore waters and Ocean Queen a 108,953 dwt oil tanker was the first vessel transferred over to V.Group’s technical management team. The remaining vessels from the Xihe fleet of almost 9 million dwt will follow suit in the coming weeks.

Xihe is set to gain from V.Group’s innovative IT system, ShipSure, which promotes efficient operations based on best industry practices. The system also provides access to more than 15 years’ worth of data insights to facilitate industry benchmarking and vessel optimisation.

There are however shadows over Xihe at the moment. Last month Singapore bank OCBC started a court appointed search for someone to manage Xihe Holdings Pte Ltd and four subsidiary companies. All are part of the Lim family empire which includes fleet manager Ocean Tankers (Pte) Ltd and oil trader Hin Leong Trading.

The collapse in oil prices is alleged to have revealed a massive ongoing fraud which hid millions of Singaporean dollars in losses using transfers between group companies à la the Bank of Credit and Commerce International (BCCI). One of the group’s bankers is apparently demanding control of the group’s financial affairs to be put under the oversight of accountancy firm Grant Thornton Singapore saying it is owed $250 million.

Group company oil trader Hin Leong Trading would appear to be at the root of the current problem with local press alleging the company’s ‘judicial managers’ PWC, appointed in April, had discovered a $3+ billion hole in the accounts with assets being grossly overstated. It seems betting on a rising oil price brought the matter to its head with creditors claiming $3.85, including at least eight banks which were owed around $1.2 billion.

The company filed for bankruptcy in April of this year and in the same month the Singapore Police Force confirmed that an investigation of Hin Leong was underway.It is alleged that the company sold oil which stood as collateral for bank lending to pay off other debts.

Photo: The Ocean Queen in calmer waters.