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The suspended chief executive of China's main jet
fuel supplier may face criminal charges linked to risky oil trades that
pushed the company to the brink
of bankruptcy, with losses of over half a
billion U.S. dollars.
"China Aviation Oil (Singapore) would like to announce that its
suspended chief executive officer, Chen Jiulin, has been notified that he
may be prosecuted for a total of 15 offenses," the company said Wednesday
in a statement to the country's stock exchange.
The Chinese company is based in Singapore, Asia's leading oil-trading
center.
Singapore authorities began a criminal
investigation of Chen and China Aviation last year, after the company
shocked markets by revealing it had lost more than US$500 million by
placing bets on the future price of oil. It began losing money in the
first quarter of 2004 and sought court protection from creditors
in December.
Wednesday's statement said Chen -- whose whereabouts are unknown -- may
be charged under the Penal Code, Companies Act and Securities and Futures
Act. It was not immediately clear what specific charges he might face.
China Aviation's head of finance, Peter Lim Tiong Sun, and three
directors, Jia Changbin, Li Yongji and Gu Yanfei, have also been notified
that they may be charged, the statement said.
The announcement follows a special auditor's report, released last
week, which said Chen was primarily responsible for the losses and the
company's nondisclosure of its mounting financial crisis, but that
failures had occurred "at every level of the company."
The auditing firm, PricewaterhouseCoopers, also said "no steps were
taken by the management or those directors of the company, who were aware
of the true position, in particular Jia, Li and Gu, to rectify the
situation."
Gu was sent to Singapore from Beijing to manage the company when it
sought court protection.
China Aviation's spectacular collapse is the biggest financial scandal
to hit Singapore since the fall of Britain's Barings Bank 10 years ago,
when rogue trader Nick Leeson's market gambles lost Barings nearly US$2
billion.
China Aviation's abrupt downfall has been a major embarrassment for
China and its state-backed companies, many of which have been trying to
improve their reputations.
The Singapore-listed company is a subsidiary of China Aviation Oil
Holdings Co., which is linked to the Chinese government and had initially
attempted to distance itself from its Singapore offshoot's losses.
Singapore police declined comment Wednesday, saying investigations were
continuing.
Also Wednesday, about 100 creditors were expected to vote on China
Aviation's proposed debt restructuring plan.
(China Daily/Agencies) | 
Updated: 2005-06-10 08:33
