Danish oil firm in more hot soup after fraud probe in S'pore office

SINGAPORE - A Danish company whose Singapore subsidiary is under investigation for fraud has announced even more bad news - this time to do with insolvency at its two main operating units.

OW Bunker said in a statement to the Nasdaq OMX echange on Thursday that its main operational activities are carried out in these two units, marine fuel supplier OW Bunker & Trading A/S and oil cargo supplier OW Supply & Trading A/S, which are now expected to be insolvent.

"The board of directors regrets that it has not been able to find a solution with the syndicate banks," the firm wrote.

The in-court restructuring procedure, to take place at the probate court in Aalborg, Denmark, is intended to establish whether or not there is a basis for continued operations, after restructuring or a capital injection.

"For the time being, the financial impact cannot be assessed," said OW Bunker in its statement.

"However, it must be assumed that the group's equity is lost."

On Wednesday night, OW Bunker had announced that it was investigating a fraud committed by senior management at its Singapore-based unit Dynamic Oil Trading.

"The extent of the fraud is not yet clear, but preliminary findings suggest a potential loss of around US$125 million (S$162 million)," said the company in a statement.

Dynamic Oil Trading was founded in 2012 and led by chief executive Lars Moller, previously head of OW Bunker in Singapore. He could not be reached for comment.

Separately, a review of risk management contracts by the company threw up a mark-to-market loss of around US$150 million (S$194 million).

It has dismissed head of risk management Jane Dahl Christensen with immediate effect.