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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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