OW Bunker Sounds Fraud Alarm

OW Bunker Sounds Fraud Alarm

OW Bunker Sounds Fraud Alarm

Denmark’s OW Bunker is investigating an alleged fraud committed by senior employees in its Singapore-based subsidiary Dynamic Oil Trading (DOT), saying that the extent of the fraud is not yet clear, but preliminary findings suggest a potential loss of around USD 125 million.

Separately, OW Bunker said that a review of risk management contracts has revealed a significant risk management loss in addition to the loss of USD 24.5 million announced on October 23, 2014. According to the company, the mark to market loss is around USD 150 million.  The company said that risk management contracts are currently being unwound in order to reduce risk management exposure to a minimum level.

Head of Risk Management and EVP Jane Dahl Christensen has as a consequence of the risk management loss been dismissed with immediate effect. The company claims that the above events have affected OW Bunker’s operations and credit facilities.

OW Bunker started discussions with the syndicate banks in an effort to solve the issue, but later on reported that the talks were unsuccessful. Therefore, the company has decided to file for commencement of in-court restructuring procedure in the subsidiaries O.W. Bunker & Trading A/S and O.W. Supply & Trading A/S at the probate court in Aalborg. The main operational activities of the group are located in these companies, which are expected to be insolvent, according to OW Bunker.

The marine fuel supplier said that the purpose of the in-court restructuring procedure is to establish an overview of whether a basis for continued operations of the companies can be established, including a basis for injecting further capital or other similar solution.

For the time being, the financial impact cannot be assessed, but OW Bunker says it must be assumed that the group’s equity is lost.

 Press Release

 

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