China Aviation Oil (Singapore) has sunk at least $152 million into debt since losing $550 million in oil derivative markets, court documents showed on Saturday, deepening one of Singapore's worst trading scandals. The Singapore-listed arm of China's dominant supplier of jet fuel owes the debt to 12 banks, High Court Judge Tay Yong Kwang told Singapore's High Court on Friday, according to minutes released on Saturday of the closed-door hearing.
CAO Singapore sought court protection last week after betting wrongly that oil prices would fall. It has not disclosed its total debts but will identify all creditors when it returns to court on January 21, the court documents showed.
"The 12 banks refer to syndicated bank creditors, there are other independent lenders," said CAO spokesman Gerald Woon.
The trading scandal is Singapore's worst since rogue futures trader Nick Leeson racked up $1.4 billion in trading losses that broke Barings Bank in 1995.
Singapore police have questioned the company's suspended chief executive, Chen Jiulin, over allegations that the Beijing parent sold shares to cover the losses at its Singapore arm in an October 20 placement arranged by Deutsche Bank AG.
Deutsche Bank has said the sale was done in accordance with normal market practice and that Germany's biggest bank would respond to questions from regulators.
Investigators are also looking at why CAO Singapore told investors on November 12 that 2004 earnings would top its 2003 profit. Chen's court affidavit, filed last week, showed his company had, at the time, already lost $232 million in oil derivatives trading.Eighteen days after that forecast for a record 2004 profit, the company disclosed it was insolvent.
Comments
Comments are closed.