Singapore looking into OW Bunker scandal
OW Bunker's local collaborator in Singapore, Tankoil Marine Services, a company that is seen as a significant contributing factor in the crash of the Danish bunker company, has stopped its physical deliveries of bunker, according to ShippingWatch's sources.
The halt in deliveries from the company's own ships allegedly began on Wednesday last week, at around the same time that the Board, executive management and banks were gathered at OW Bunker's headquarters in Nørresundby, Denmark, in a desperate attempt to save the Danish bunker company.
Tankoil Marine Services' office declines to either confirm or deny ShippingWatch's information that the company has stopped physical deliveries of bunker fuel in Singapore, where the Maritime and Port Authority (MPA) - which monitors the around 60 bunker companies in the country that are licensed to trade bunker fuel - is currently investigating conditions at Marine Tankoil Services.
OW Bunker crash leaves bloody trail through oil companies
Now-bankrupt OW Bunker has potentially lost up to USD 125 million in Singapore by financing oil purchases for Marine Tankoil Services.
Financing supplier
Arvid Andersen, lawyer for the management team of OW Bunker's Singapore-based subsidiary Dynamic Oil Trading (DOT), has confirmed to Danish media Finans that the alleged fraud, as claimed by OW Bunker's management, concerns massive credits to Tankoil Marine Services in the form of "credit sleeving" - that is, when a third party helps financing a purchase for a partner who does not have the necessary funds or credit worthiness to perform the purchase on its own.
Dynamic Oil Trading has purchased the oil from a refinery and sold it at a very small profit to Tankoil Marine Services. As such, Dynamic Oil Trading was able to book a quick profit, but only on paper, as the sale was done on credit and the profit will not be realized until the oil is sold on to carriers.
OW Bunker files for bankruptcy
The method is fraught with risks as it involves significant volumes, and because a company cannot mortgage "sleeved" oil as opposed to oil sold to carriers, where the delivery is protected by international maritime rules. Sleeving can thus be categorized as an unsecured loan, according to Finans.
Arvid Andersen has told Finans that the case involves one single collaborator in which the credits have become far too great, and greater even than what DOT's management was authorized for:
"This is a commitment that has accumulated over a longer period of time."
ShippingWatch's sources say that OW Bunker is well-known for financing suppliers on a large scope.
Tankoil Marine Services controls six tanker vessels, according to the company's own account.
Strict control in Singapore
Singapore's Maritime and Port Authority (MPA) is known for its strict monitoring of bunker companies in the country. In September this year the MPA revoked bunker supplier Northwest Resources Pte.'s license - the fourth supplier to have its license revoked by the island state during this year alone, and the eight company since 2012.
The other seven are Coteam Petroleum, Winbuild Petrofin, Coast-Channels Marine Services, Golden Lights HS Bunkering, Palmstone Petroleum, Excel Petroleum Enterprise and Lian Hoe Leong & Brothers.
OW Bunker's management team has not responded to ShippingWatch's inquiries.
Starting today, Monday, November 10th, OW Bunker A/S has been erased from trading and official listing on the Copenhagen Stock Exchange after the company was declared bankrupt on Friday.
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