Du Yuanquan, a spokesman with the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council, said the company seriously violated the decision-making process and made wrong judgments on the trading, which led to massive losses valued at roughly 550 million US dollars.

China Aviation Oil Holding Company, the corporate parent which owns 75 percent of stocks of the Singapore company, is investigating losses, Du said.

Du said the losses should be dealt with in accordance with concerned commercial rules in Singapore. The Singapore company is now looking for investors to cover its debts.

He said SASAC has asked the Singapore company to cooperate with the investigation by Singapore authorities.

Du also said his commission is closely observing the investigation and is going to punish the management members responsible for the losses.

SASAC urges other state-owned enterprises to get lessons from the China Aviation Oil losses and set up effective risk-control mechanisms overseeing their overseas subsidiaries, he said.

With a registered capital of 3.6 billion yuan (435 million US dollars), China Aviation Oil is controlled and overseen by SASAC. The company established an aviation oil filling network in nearly 100 domestic airports and provides oil-filling service for 108 domestic and international airlines.