Fraud Investigation at Aegean Focused on Shell Companies

Thursday November 1, 2018

A fraud investigation is underway at marine fuels company Aegean Marine Petroleum Network, the Financial Times has learned.

The focus of the investigation by forensic auditors from EY is $200 million which may or may not have involved "fake transactions with brass-plate companies", according to the FT report.

In June, Aegean wrote down $200 million in its 2017 accounts related to suspect transactions with four of its counterparties.

Prior to discovery of the not properly accounted for $200 million, a fundamental disagreement between the company and some of its shareholders over the way the company was run had emerged, headed by US-based investment funds grouped under the committee for Aegean responsibility.

Poor financial results, a failed acquistion and disagreements over the company's direction saw Aegean's share price flatline. But in July a fresh injection of capital came from commodity trading outfit Mercuria put the company on a firmer financial footing.

Citing seen documents and people in Athens with the knowledge of the investigation, the FT report said that four companies were being scrutinised over possible involvement "in transactions in order to falsify commercial transactions and cover up misappropriation of funds". The companies are named as Abdul Azim Trading, Savina Maritime, South Seas Maritime and Miami Exports Group.

A source quoted in the report refers to the four companies as shell companies.

The company's law officer, Spyros Focas, has said he would be unable to comment on matters handled by the auditors, according to the report.  No charges have arisen out of the investigation

Aegean is based in Athens and listed on the New York stock exchange. The company's share price was running at just over a dollar on October 31.