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)
