Oct 7 (Reuters) – A number of financial scandals, including allegations of fraud and suspect deals, have hit the energy and commodities sector following the slump in oil prices sparked by the coronavirus crisis, adding to those from recent years.
Banks have tightened credit to the sector, in part due to troubles at Singapore-based Hin Leong Trading Pte Ltd, formerly one of Asia’s largest fuel traders. Some banks, like ABN Amro (ABNd.AS) and the Swiss arm of BNP Paribas (BNPP.PA), have exited trade and commodity financing. read more
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Below are some notable cases in the sector.
2020
Company: Agritrade International Pte Ltd
Base: Singapore
Summary: Agritrade International was placed under judicial management in February after it collapsed amid allegations of fraud. It owed $1.55 billion, including $983 million to at least 20 banks. read more
Companies: Hin Leong Trading Pte Ltd, Ocean Tankers (Pte) Ltd., Xihe Holdings Pte Ltd and four of Xihe’s special purpose vehicles
Base: Singapore
Summary: Several companies owned by Singaporean tycoon Oon Kuin Lim and his children were placed under court-led restructuring after Lim said he didn’t disclose $800 million of losses. read more L3N2CB0XA
The collapse of the companies has prompted multiple lawsuits among traders such as Unipec, Trafigura, and several banks over cargo claims and payments. read more
Italy’s UniCredit SpA (CRDI.MI) has sued Hin Leong and Glencore (GLEN.L) over a letter of credit, one of several the Singapore oil trader sought from lenders for oil purchases but used to pay debt instead. read more
Seven tankers of the near 150-strong fleet owned by the Lim family have been put up for sale. read more
Company: ZenRock Commodities Trading Pte Ltd
Base: Singapore
Summary: The Singapore High Court put ZenRock Commodities under interim judicial management in May after one of its creditors HSBC Holdings PLC (HSBA.L) alleged “highly dishonest transactions” at the firm. Zenrock owes more than $600 million to creditors. read more
Banque de Commerce et de Placements SA, DIFC Branch, has sued China Aviation Oil (Singapore) Corp Ltd over an alleged fraudulent deal as the Swiss bank seeks to reclaim the $19 million it paid to CAO for a cargo BCP financed on behalf of ZenRock. read more
Company: Hontop Energy (Singapore) Pte Ltd
Base: Singapore
Summary: Hontop Energy (Singapore) Pte Ltd owes nearly $470 million to seven banks and was placed under court supervision after banks alleged suspicious transactions. read more
BP (BP.L) terminated four trading and operations staff responsible for Chinese crude oil sales as a result of an internal investigation into trades with Hontop. read more
Company: GP Global
Base: United Arab Emirates
Summary: GP Global, a supplier of marine fuels worldwide with offices in Europe, Asia and America, is undergoing restructuring after it said it had failed to “get full support from a few financial institutions” and that an internal investigation revealed employee fraud. read more
Company: Phoenix Commodities Pvt Ltd
Base: Dubai and Singapore
Summary: The agricultural products trader is being liquidated after amassing more than $400 million in potential trading losses. read more
Company: Coastal Oil
Base: Singapore
Summary: Two former employees of Singapore marine fuel firm Coastal Oil were charged in June for allegedly creating fictitious sales contracts and invoices to obtain financing between July 2017 and December 2018 to cheat eight banks of more than $340 million. read more
Company: Idemitsu Kosan Co (5019.T)
Base: Hong Kong
Summary: Idemitsu booked $36 million in losses related to a remittance fraud at its chemicals unit in Hong Kong in the second quarter of 2020.
2019
Company: Petro-Diamond Singapore (PDS)
Base: Singapore
Summary: Japan’s Mitsubishi Corp (8058.T) said in September 2019 that a trader at PDS had lost $320 million through unauthorised transactions in crude oil derivatives. Mitsubishi shut the 30-year-old Singapore oil-trading unit following the losses. read more
Company: Inter-Pacific Petroleum Pte (IPP)
Base: Singapore
Summary: The Singapore marine fuel supplier was placed under a court-appointed supervisor to manage more than $168.5 million in outstanding liabilities. Singapore’s Maritime Port Authority had earlier suspended IPP’s licence to operate bunker fuel tankers after detecting operational irregularities during an inspection. read more
2018
Company: Royal Dutch Shell (RDSa.L)
Base: Singapore
Summary: Around $150 millions’ worth of oil was stolen from Royal Dutch Shell’s (RDSa.L) biggest refinery over several years. Two Vietnamese have been sentenced to jail for their involvement in the oil heist case. The founder of Sentek Marine & Trading, one of Singapore’s biggest marine fuel suppliers, has been charged for his involvement in the theft. read more
Compiled by Florence Tan; editing by Richard Pullin
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