One of the world's largest bunker players, Aegean Marine Petroleum Network, could be the victim of a fraud of up to USD 310 million, announces the company in connection with an internal investigation by the audit committee of the company's board of directors.

The committee says it believes that "up to USD 300 million of Company cash and other assets were misappropriated through fraudulent activities," and was allegedly committed by management figures.

The committee has found that approximately USD 200 million of accounts receivable on the Company’s books and records from transactions arising in 2015, 2016 and 2017 lacked "economic substance as the relevant counterparties were shell companies," and were improperly recorded. "The Audit Committee believes that the receivables were improperly recorded as part of a scheme to facilitate and conceal an extensive misappropriation of Company assets," writes Aegean in the statement.

The bunker company already had doubts about the USD 200 million at the beginning of the summer, when the company briefly announced a significant impairment of approximately USD 200 million in its 2017 report.

The committee has also found evidence of other fraud attempts against the company tracing back to 2010, involving advance payments for future oil deliveries which were never delivered according to Aegean.

In the press release, the committee adds that the bunker company has had to impair the USD 200 million and also announces that it can no longer count on its annual reports from the past three years.

Threats against employees

Aegean states that several employees are behind the fraud, including members of senior management who have now been dismissed. According to the investigation, bank and accounting documents, contracts, invoices and third party certificates.

The investigation also found that a company registered in the Marshall Islands, behind which is a former associated affiliate  is involved in the fraud.

"The Audit Committee believes that this misconduct occurred in part because the Former Affiliate has exerted significant control over Company personnel and assets through various inappropriate means, including threats of economic retaliation and physical violence," writes Aegean in the press release.

During its investigation, Aegean has found "at least one attempt to delete and permanently erase documents from the Company’s server through the remote installation of data deletion software by a person with administrator access." The Hellenic Data Privacy Authority has issued a provisional order which prohibited the review or use of emails and other files collected from the company's Piraeus, Greece server in connection with the Audit Committee’s investigation.

Since the summer, Aegean has submitted the results of the investigation to the US Securities and Exchange Commission and Justice Department.

Aegean adds that it intends to "pursue these matters vigorously."

"The Company intends to take appropriate steps to seek redress from responsible individuals and other parties for the harm to the Company caused by their involvement in the activities described above, including instituting legal proceedings and seeking to seize assets in applicable jurisdictions wherever feasible and appropriate," writes Aegean.

New CEO and credit deal

In September, Aegean reshuffled its management after then-CEO Jonathan McIlroy stepped down from the role and was replaced by Kostas Poydakis.

The Greek bunker company, which is listed in New York, entered a credit deal in the summer for USD 1 billion with US trading firm Mercuria Energy Group. It followed a tumultuous period for Aegean after a group of critical shareholders entered the company board.

The deal made Mercuria Aegean's only creditor, and thus far Aegean has secured USD 30 million, while work is continuing on two ongoing credit deals.

English Edit: Lena Rutkowski

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