The prospectus for the OW Bunker IPO contains "significant misinformation."

This is the conclusion from ad hoc trustee Søren Halling-Overgaard in a 400-page review, which FinansWatch and ShippingWatch are in possession of.

Thus a new page has been turned in the dispute regarding bankrupt company OW Bunker, which failed after barely eight months on the stock exchange, November 7th of last year. The review has been highly anticipated - and feared - by pivotal figures in the OW Bunker executive management, because it points the finger at the people, who according to the trustees, are responsible for the company's collapse. And the review raises significant criticism of the prospectus - which is the sales pitch of 271 pages, constituting the foundation of the Initial Public Offering of OW Bunker.

Here is the report on liability in the collapse of OW Bunker 

The prospectus is shot down. It contains "excluded", "incorrect" and/or "misleading" and/or "deceptive" information, the trustee writes in the review.

The prospectus is so full of deficiencies that the trustee assesses it is unlawful and in violation of the Danish Securities Act, the trustee writes. The insufficiencies are so significant that the prospectus does not abide to the law based on the information which the trustee had access to, but he writes "that there is most likely further relevant information which could have importance for an evaluation of the total prospectus."

Lacking cases

But the lack of a specified legal practice and the non-existence of previous similar cases mean, that the trustee is of the opinion that it should be up to a Danish court to decide if the prospectus is as insufficient as he has concluded.

The trustee assigns responsibility to a number of key figures in the dispute regarding the bankruptcy of OW Bunker.

This includes the CEO of OW Bunker, Jim Pedersen, the executives Jane Dahl Christensen and Götz Lehsten, as well as OW's CFO Morten Skou. Furthermore, Søren Johansen and Petter Samlin, partners in Altor, the equity fund backing OW Bunker, which according to the trustee have had intensive knowledge about the prospectus.

Board member Jakob Brogaard is under attack as well, as he has been on the board of OW companies since 2008.

He "should have reacted" and he should "not have acceded to" ... "the prospectus statement," as it is called.

Chairman exempt

On the other hand, the chairman of the board at OW Bunker, Niels Henrik Jensen, is shielded from liabilty. It cannot be clarified that he had such an extent of knowledge about the actual circumstances at OW Bunker that he can be held responsible. Add to this, the fact the he did not join the board until March of 2014, when the IPO was actually carried out, the trustee writes.

He also rejects targeting the former ØK executive Tom Behrens-Sørensen, as well as former DSV CEO Kurt Larsen for prospectus liability, writes the trustee.

Jim Pedersen's lawyer John Korsø Jensen declines to comment on the case. He has not seen the review, and he is not pleased with that.

"I have not read it and I do not wish to comment on it when they have been so incompetent as to release it, without presenting it to the parties involved," he says.

It was not possible to get a comment from Søren Johansen of Altor.

There are a number of areas, which are not properly mentioned in the prospectus, according to the trustee.

The series of holes

The review lists a number of issues: Incomplete financial reports leading up to the IPO, which are described as deceptive. Incomplete information on Dynamic Oil Trading in Singapore, which is not mentioned at all in the prospectus, but which ended up completely knocking OW Bunker to the ground, due to enormous amounts of credit given to one single customer.

In addition to this, it is not evident from the prospectus that the risk management in OW Bunker, was partly pure speculation. The investors just did not understand this, and at the investor meetings leading up to the IPO of OW Bunker, they asked for more information. Søren Halling-Overgaard covers these issues carefully and works as a so-called ad hoc trustee, as he single-handedly tries to find those responsible for compensation in the complex case.

He has had comprehensive access to information in the collapsed company and has discovered that investors, in the period before the share issue, have called for a lot more information regarding the full-blown speculation, which took place at OW Bunker regarding the rise and fall of the oil price.

Meanwhile, a sales process before the IPO showed that people with insight in bunker companies concluded, after reviewing OW Bunker, that the company was worth somewhere between 20 and 40 percent of the approximately USD 780 million which the company ended up generating in the IPO. The competent buyers, which ended up bidding low, simply subtract the budgeted growth of OW Bunker, as well as the extraordinary expenses for risk management, pure full-blown speculation, when they bid on the company, assesses the trustee.

Banks knew

The banks Morgan Stanley and Carnegie as well as the equity fund Altor Equity Partners, have been fully aware of these circumstances, the trustee writes.

He writes:

"The concerned parties have thus been aware, that the price formation, which took place in relation to the failed/canceled sales process and targeted towards industry savvy, potential buyers, could have a negative effect in the IPO" and continues - that there was an obvious need for knowledge about the risk management's significance for the earnings.

But the trustee concludes:

"... above mentioned conditions are not reflected in the final prospectus, which formed the foundation for the allocation..."

Major investors postpone OW lawsuit

Carrier forced to pay OW bunker-bill twice

OW trustee struggling to reach Asian customers

OW trustees question financial reports from 2011-2013