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| CAO Directors Fined for Speculative Oil Deals |
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Three non-executive directors of China Aviation Oil (Singapore) Corporation Ltd (CAO) were ordered by a Singapore judge to pay fines on Thursday for their roles in the company's decline. Jia Changbin, non-executive chairman of 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, in its judgment delivered on Thursday, said that the three directors were charged with "failing to notify the Singapore Exchange of realized losses". Jia Changbin had 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 court will formally sentence Chen Jiulin, former chief executive of CAO, in the next few days, according to a company statement. Michael Khoo, attorney for the directors, was quoted in the statement as saying that the three directors made unintentional mistakes. Facts showed that they all recognized the importance of abiding by the law, but anyone could have made the same wrong decisions when faced with the pressing situation of trying to save the company, Khoo said. Based in Singapore, CAO, 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. But creditors agreed to allow the company to seek investors for restructuring before it re-lists on the Singapore Exchange. Further, the company was thrown a lifeline worth US$130 million last December by its Beijing-based parent, China Aviation Oil Holding Co (CAOHC), oil group BP and Singapore's Temasek Holdings. An extraordinary general meeting, to be chaired by Jia Changbin, will be held on Friday to complete the restructuring process, CAOHC said. 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. (China Daily March 3, 2006)
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