News

In 2020, Hin Leong Trading (Pte) Ltd (HLT), formerly one of Asia’s largest oil traders, collapsed and entered liquidation amidst revelations of systemic fraud perpetrated by its controllers. The following year, the liquidators commenced proceedings against HLT’s former statutory auditor, alleging that its failure to detect fraudulent misstatements in HLT’s financial statements had enabled the company to continue trading while insolvent and incur a staggering US$2.6 billion in trading losses.

Acting for the auditor, WongPartnership contended that the losses flowed from management’s own trading decisions and adverse market movements, rather than from the audit. To impose liability for such losses would impermissibly transform auditors into insurers of a company’s trading fortunes and guarantors against market conditions.

In a landmark judgment by a five-member coram, the Court of Appeal reversed the decisions of the courts below and struck out HLT’s claim for trading losses for being too remote, marking an important limit on the scope of auditor liability. The apex court also revisited the foundational principles of negligence and articulated a six-part framework that is set to provide guidance on the analysis of future negligence claims in Singapore.

The WongPartnership team comprised Tan Cheng Han SC (Senior Consultant), Wendy Lin (Deputy Head of the Commercial & Corporate Disputes Practice), Monica Chong Wan Yee (Partner), Brandon Wong Wei Lun and Matthew Tan Ju Wei (Associates) and Adri Faris B Mohd Affendi (Practice Trainee).

Click here to view the Court’s judgment in Deloitte & Touche LLP v Hin Leong Trading (Pte) Ltd (in compulsory liquidation) [2026] SGCA 33 and here to view WongPartnership’s case update.