(July 8): Troubled Singapore-based oil trader ZenRock has plans to wind down its business, with employees across offices in the city-state and China set to depart by August, according to people with knowledge of the matter.

ZenRock Commodities Trading Pte Ltd. is among a handful of trading houses in the spotlight after oil’s historic plunge earlier this year, which has sparked feuds with international lenders and accusations of dishonest deals in Asia’s commodities hub.

See: HSBC files application to put oil trader Zenrock Commodities under judicial management

The company is expected to hand over responsibilities to a judicial manager, said the people, who asked not to be identified as the information is private. KPMG LLP was named interim judicial manager in May, just as ZenRock was raided by police following the allegations it used the same oil cargo to obtain more than one bank loan, according to court documents seen by Bloomberg.

See also: Police raid oil trader ZenRock's office after HSBC allegations

Those accusations form part of its tussle with HSBC Holdings Plc, which has an exposure of almost US$49 million ($68.3 million) to the trader. The company owed more than US$166 million to six lenders as of April 17. It traded more than 15 million tons of oil and petroleum products last year and posted a revenue of US$6.15 billion in 2018, compared with US$1.24 billion in 2016, based on information on the website of Singapore’s accounting regulator.

ZenRock was established in Singapore in 2014 by a group of veteran oil traders including Xie Chun and Tony Lin. Xie used to work for Unipec, the trading arm of Chinese state-owned oil refining giant Sinopec, and Lin was previously at Vitol SA, the world’s biggest independent oil trader. The company had about 100 employees globally, with about 60 of those based in Singapore. More than half of its staff has already departed in recent weeks, according to one of the people.

Multiple attempts to contact ZenRock by phone and text message were unsuccessful. KPMG declined to comment on the issue, while ZenRock’s lawyer Rajah & Tann LLP didn’t respond to an email seeking comment.

Lenders such as HSBC, Natixis SA and CIMB Group Holdings Bhd. and Singapore-based banks have found themselves with sizable exposures to failed oil traders, including Hin Leong Trading (Pte) Ltd., which was the biggest financial scandal to hit the city-state in years.

The plunge in crude prices prompted creditors to seek more cash as the value of collateral shrunk, which only brought more issues to the surface when companies struggled to pay up. Banks have reduced credit lines and become more cautious when financing commodity trades as a result, a move that will hurt companies involved in the high-capital, low-yield business of oil trading.