Hin Leong's $3.4b claim against Deloitte struck out
Singapore's Court of Appeal has dismissed a $3.4 billion claim by the insolvent oil trader Hin Leong against its former auditor, Deloitte. The court ruled that the auditor could not have reasonably foreseen the company's trading losses or fraudulent activities.
Why it matters
This ruling clarifies the legal boundaries of auditor liability, reinforcing that auditors are not responsible for the trading strategies or insolvency of their clients.
The Court of Appeal has determined that Hin Leong’s trading losses were “not reasonably foreseeable” by Deloitte when it undertook the engagement.
SINGAPORE – The apex court in Singapore has struck out insolvent oil trader Hin Leong Trading’s largest claim of US$2.6 billion (S$3.4 billion) against its former external auditor.
A five-judge Court of Appeal on July 16 allowed an appeal by auditing firm Deloitte & Touche that arose from a pre-trial application to strike out Hin Leong’s claim for trading losses.
The decision leaves Hin Leong with two remaining claims – one for US$90 million in dividends that were wrongfully declared by the family of its founder Lim Oon Kuin , and another for $612,000 in audit engagement fees paid to Deloitte.
In a 96-page judgment, the court ruled that Deloitte is not liable for the trading losses Hin Leong incurred from November 2015 to mid-April 2020.
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