World News
Lawyer: OW Bunker Management Must Have Known What Was Going On Between DOT and Tankoil
The lawyer for Lars Møller, CEO of now-defunct Dynamic Oil Trading (DOT), has said management at DOT's Danish parent company OW Bunker A/S (OW Bunker) must have known what was going on with regards to DOT's credit exposure to Tankoil Marine Services (Tankoil), Danish media reports.
DOT was said to have earned large interest payments for the OW Bunker group from its lending to Tankoil under a "credit sleeving" scheme.
"So for the management in OW Bunker to suddenly come afterwards and say, they knew nothing about it, seems very strange," said Arvid Andersen, lawyer for Lars Møller.
Indeed, bunker trading with companies such as Tankoil was a key part of DOT's business model, according to a Shippingwatch report.
DOT was a trader and did not possess the required license to physically deliver bunkers in Singapore, but it sold to companies such as Tankoil that could.
Through the process called credit sleeving, it is understood that DOT sold large volumes of bunkers to Tankoil on open credit while booking large paper revenues and slim, but quick, profits.
In 2012 Tankoil was 67th among Singapore's bunker suppliers ranked by sales volume, but in 2013 jumped to seventh largest at the port.
From DOT's start up in August 2012 to the end of 2013, DOT had revenues of $2.1 billion, according to Bloomberg citing company records.
On Tuesday KPMG was appointed to wind up DOT and liquidate its estate.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 649.00 | 0.50 | 775.00 | 3.50 |
| Rotterdam | 603.50 | 1.50 | 759.50 | 11.50 |
| Houston | 626.50 | 2.50 | 794.00 | 2.00 |
| Fujairah | 649.00 | 0.50 | 904.50 | 6.50 |
| Global 20 Ports Average | 664.00 | 2.00 | 855.00 | 0.00 |
| Global 4 Ports Average | 632.00 | 1.00 | 808.00 | 4.00 |
| Global Average Bunker Price | 716.50 | 1.00 | 901.00 | 12.50 |
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