Former CEO admits to cheating

THE former Singapore head of fuel trader China Aviation Oil pleaded guilty to six of 15 charges against him on Wednesday, in the city state's biggest trading scandal since rogue trader Nick Leeson brought down Barings Bank. 

China Aviation Oil (Singapore) Corp Ltd nearly collapsed in 2004 amid S$550mil (RM12.2bil) in trading losses. 

Chen Jiulin, who was the chief executive officer from 1997 until he was suspended from the job in November 2004, admitted to six charges including making false or misleading statements, failure to inform the Singapore exchange of CAO's losses, conspiring to cheat Deutsche Bank, and procuring CAO's parent firm to commit insider trading. 

Chen admitted to the six charges at the start of a two-day court hearing. The cheating and insider trading charges relate to the sale of a 15% stake in CAO by its Beijing parent in October 2004, just one month before the Singapore firm sought protection from its creditors for its trading losses. 

Deutsche Bank managed the S$111mil (RM224mil) share sale to institutional investors. 

Singapore's central bank fined CAO's state-owned parent, China Aviation Oil Holding Co, S$8mil (RM17.6mil) last August for insider trading related to the October 2004 share sale. 

Several of the 15 charges against Chen, who oversaw the Beijing-backed firm's stellar rise and played a key role in events leading to its near collapse in November 2004, carry a maximum sentence of seven years in prison and a fine of S$250,000 (RM550,000). – Reuters/ Asia News Network  

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