Thursday, June 9, 2005

CAO chief executive arrested

by Brian Turner

The chief executive of state-owned jet fuel importer China Aviation Oil and four executives of CAO’s parent company, Beijing-based China Aviation Oil Holdings, were arrested by Singapore police on Wednesday.

The five men were charged with hiding losses from oil derivatives trading and with participating in insider trading that precipitated the largest market scandal in Singapore since 1995.

The arrests came shortly before CAO’s creditors approved a plan to restructure the company’s debt.

This plan could allow Chinese Aviation Oil Holdings to put together a joint venture with Temasek Holdings, the Singapore state investment company to inject $50 million into CAO. Temasek would receive a minority share of the company in exchange.

The filing of charges in Singapore, which is believed to be the first time that this has happened to executives in a non-Chinese jurisdiction, is expected to give investors more confidence in the accountability of state-owned Chinese companies and their subsidiaries that are listed overseas.

 

 

 

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