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Oil firm officials ordered to pay fines
By Xin Dingding (China Daily)
Updated: 2006-03-03 06:10
Three non-executive directors of a Chinese oil trading company were ordered
to pay fines by a Singapore judge yesterday for their roles in the company's
decline.
Jia Changbin, non-executive chairman of China Aviation Oil (Singapore)
Corporation Ltd (CAO), was fined S$400,000 (US$247,000), and directors Gu Yanfei
and Li Yongji were each fined S$150,000 (US$92,600).
The Singapore Subordinate Court said in a statement yesterday that the three
directors were charged with "failing to notify the Singapore Stock Exchange of
realized losses." Jia Changbin faced an additional charge of insider trading.
If they cannot pay their fines, Gu and Li will go to prison for one year, and
Jia will be imprisoned for two and a half years, the statement said.
The court will sentence Chen Jiulin, former chief executive of CAO, in the
coming days, a company release said.
Michael Khoo, the three directors' attorney, was quoted in the release as
saying that the three directors made unintentional mistakes.
Facts showed they all recognized the importance of abiding by laws, but
anyone could have made the same wrong decisions when faced with the urgent
situation of trying to save the company, Khoo said.
Based in Singapore, the main jet fuel supplier for China's aviation industry
nearly went bankrupt when it announced in November 2004 a US$560 million loss in
speculative oil deals in Singapore.
As CAO creditors agreed to allow the company to seek investors in
restructuring before it re-lists on the Singapore Exchange, the company was
given US$130 million last December to help it survive by its Beijing-based
parent, China Aviation Oil Holding Co (CAOHC), oil group BP and Singapore
State-owned investor Temasek.
An extraordinary general meeting will be held today to complete the
restructuring process, hosted by Jia Changbin, said CAOHC.
Peter Lim Tiong Sun, former chief financial officer of CAO, was the first
company official to be punished after the huge losses were revealed. He was
sentenced to two years in prison and fined S$150,000 (US$92,600) on February 21
for making false statements and cheating on Deutsche Bank.
(China Daily 03/03/2006 page2)
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