Top 10 Singapore Bunker Supplier Tankoil Marine Services Implicated in Alleged Dynamic Oil Trading Fraud

The alleged fraud is said to actually be a "credit sleeving" scheme

One of Singapore's top 10 bunker suppliers by volume, Tankoil Marine Services Pte. Ltd. (Tankoil), has been implicated in last week's alleged $125 million fraud by Dynamic Oil Trading (DOT), Danish Media reports.

According to the report, Arvid Andersen, a lawyer said to be acting on behalf of DOT management, explained that the alleged fraud involved a large amount of credit given to an unknown number of players in the form of "credit sleeving", with the principal recipient of the credit being Tankoil.

Under the scheme, which was described as being like an unsecured loan and a "well known" practice within shipping circles, a third party helps fund a purchase for a partner company who does not have enough financing or credit to otherwise make the deal.

In this instance, DOT bought product from the refinery and sold it on to Tankoil at a very small, but quick profit.

However, because the transaction was based on credit, the profit was only on paper and would not actually be realised until Tankoil had sold on the oil to a buyer at their end.

Shipping Watch reported that its sources said OW Bunker was well-known for financing suppliers on a large scale, and that the fraud amounted to DOT management having exceeded the authorised amount that such credit could be given.

The report also said Tankoil stopped physical bunker deliveries last Wednesday, the same day OW Bunker revealed it had been hit by the $125 million fraud plus a $150 million loss due to its risk management policy.

The Maritime and Port Authority of Singapore (MPA) were reported to be "investigating conditions at Marine Tankoil Services" but this has not been verified by Ship & Bunker.

In 2012 Tankoil was ranked number 66 on the MPA list of top bunker suppliers by volume, and rocketed into seventh place last year, according to official MPA data.

On Friday OW Bunker filed for bankruptcy and said it had decided to report two DOT employees to Police over the matter, while DOT say nothing illegal has taken place.