Hin Leong Trading Pte Ltd ("HLT") is a commodity trading corporation that is registered and headquartered in Singapore. It was established in 1963 by Lim Oon Kuin and became one of Singapore's largest independent oil traders. As of 2020, HLT had three directors who were also shareholders of the company. The three directors are Mr. Lim, his son (Evan Lim Chee Meng), and his daughter (Lim Huey Ching).

In April 2020, the company was put under judicial management, with debts of about $5.46 billion owed to 23 banks.

In a court filing, Mr. Lim admitted that he knowingly directed the company's personnel to not disclose $1.14 billion of losses incurred over the past few years. In addition, he stated that the company had secretly sold off its inventory (part of one million barrels of oil) which had been pledged as collateral for its loans.

The losses and inability to pay its debt were attributed to the collapse of oil price for the past few years and the recent coronavirus pandemic. The latter hammered oil demand and oil price and pushed up costs for the company.

As of 2020, HLT's liabilities exceed its assets by about $4.34 billion.

It has also been alleged that Mr. Lim and his two children had transferred $3.5 billion (with an additional $90 million in dividends) from HLT to their own personal accounts, even though the company was insolvent.

Review the following news articles and conduct further research (where relevant) before answering the questions below:

• https://www.straitstimes.com/business/companies-markets/hin-leong-under-interim-judicial-management
• https://www.straitstimes.com/business/companies-markets/hin-leong-founder-ok-lim-and-two-children-sued-by-bankrupt-firms-judicial
• https://www.asiaone.com/singapore/head-oil-trader-hin-leong-didnt-disclose-11b-losses-court-filing

Required:

(a) Describe three (3) possible scenarios in which one or more directors may have breached their duties under the Companies Act, Cap. 50 of Singapore and/or common law, based on the facts and possible scenarios contemplated above. In your answer, you should explain why the details of the scenarios result in a breach of directors' duties, with reference to the relevant statutory provisions and/or case law.(30 marks)

(b) Comment on the liabilities which the directors may face, and the remedies which the company may have, in relation to the breach of directors' duties which are described in your answer to Question 1(a) above. Support your answers with specific details which are relevant to each one of such scenarios. Conclude with one (1) recommended action which HLT can take to strengthen its corporate governance and reduce the risk of a potential breach of directors' duties in the future. (15 marks)