The suspended chief executive of China's main state-linked jet
fuel supplier, China Aviation Oil (Singapore) Corp (CAO), and four
other company officials were charged yesterday with insider
trading, making false statements and other crimes linked to risky
oil trades that pushed the company to the brink of bankruptcy last
year.
Chen Jiulin, 44, was charged with a total of 15 offences,
including 10 for making false statements, forgery, insider trading
and failure to disclose company losses.
Each of the false statements charges carries a maximum sentence
of seven years in jail and a fine of 250,000 Singapore dollars
(US$150,000).
Chen, once hailed as a rising star in Singapore business
circles, was solemn as the charges were read out and remained
silent during the proceedings. The courthouse was packed. His bail
was set at 2 million Singapore dollars (US$1.2 million) and he is
to reappear in a Singapore district court on June 17. He did not
post bail.
Also charged in the case were three other company directors, Li
Yongji, Gu Yanfei and Jia Changbin, and Peter Lim Tiong Sun, the
former head of finance.
These senior executives are charged with failure to disclose
company losses.
According to a statement released by the company, these senior
executives didn't comply with Singapore's Company Law and
Securities and Futures Trading Law legislation when they failed to
report market-to-market (MTM) losses to the Singapore Exchange as
per their obligations as a listed company.
Jia Changbin, president of parent China Aviation Oil Holding Co,
has also been identified as one of those involved in the alleged
insider-trading sale of CAO shares, equivalent to a 15 percent
stake in CAO, last October. The share placement was done apparently
in a bid for CAO to sidestep creditors.?
Singapore authorities began a criminal investigation of Chen and
China Aviation Oil last year after the company shocked markets by
revealing that it had lost more than US$500 million from gambling
on the future price of oil. It began losing money in the first
quarter of 2004 and sought court protection from creditors in
December after crude futures hit then-record prices.
Prosecutors allege that Chen lied on several occasions to cover
mounting losses. They said Chen released "misleading" information
and "did not care" whether the company's half-year financial report
was true or false.
(China Daily June 10, 2005)