EMEA News
Reports: OW Bunker, Altor Colluded to Hide Speculation at Collapsed Fuel Trader
Documents have been uncovered suggesting OW Bunker management and its private equity backers Altor colluded over how to present revenues from speculative activities, Danish media reports.
Among the documents is reportedly an email, dated November 27, 2012, between OW Bunker management and Altor discussing differing method of accounting presentation regarding the company's "risk management" activities.
"If it is true that you have worked with two alternatives, one of which is that you tell about how much money you actually earn in risk management and the other is where you put it into the category of cargo, then you say that it's reasonable to conclude that the intention was to conceal the proceeds of risk management," said Søren Friis Hansen, professor of corporate law at Copenhagen Business School (CBS) after seeing the documents.
Danish pension fund PFA, which is said to have lost over $100 million from the collapse of OW Bunker, said the revelations are "very surprising."
"It's something that confirms to us that it is the right action we have taken, by launching an independent legal investigation into OW Bunker's bankruptcy," said Jens Langmack, managing director of PFA Asset Management.
"There is certainly no doubt that speculation was greater than when we went into it, and it obviously affects the assessment, we have given the company.
"We had a meeting with management, the Board, Altor and read prospectuses and based on the information there was nothing to suggest that the company should have had an appetite for risk, as the new information suggests they had".
According to the report, OW Bunker has lost $900 million since its collapse from speculative positions it held relating to oil prices, suggesting its "risk management" portfolio was by no means insignificant.
Altor has responded to the news, saying only that OW Bunker's core business was selling fuel, not speculation.
"OW Bunker was a company where the core business was to supply fuel to ships on a global basis and not a business based on speculation in oil as someone now wants to make it," said the firm in an emailed response after declining an interview with ABC News.
PFA is one of a group of Nordic investors that has initiated a legal investigation into the circumstances surrounding OW Bunker's collapse.
Anders Nemeth, lawyer for one of the staff accused of fraud at OW Bunker's Singapore subsidiary, Dynamic Oil Trading (DOT), recently questioned a separate accounting policy change by OW Bunker, suggesting OW Bunker had tried to disguise the amount of interest income at DOT was from heavy credit lines.
