China Aviation Oil (Singapore) Corp, the major importer of China's jet
fuel, sought court protection from creditors after it lost US$550 million in
speculative oil trading.
It is Singapore's largest derivative trading loss since 1995.
The company is listed and headquartered in Singapore, but majority-owned by
the mainland's China Aviation Oil Holding Co.
The collapse of CAO, which was once touted as the most transparent listed
company in Singapore, has caused considerable concern over the creditability of
Singapore-listed mainland companies.
CAO racked up losses in late November after it made a wrong bet on the
movement of oil prices.
Chinese authorities criticized slackened risk supervision and management of
CAO. It blamed the company for "violating the regulations" by conducting oil
futures trading business. After the crisis, it has been seeking strategic
investors to restructure the company.
The Singapore High Court has agreed that CAO shall submit a restructuring
plan by June 2005.
China Aviation Oil Holding Company (CAOHC), CAO's parent company, said its
domestic fuel supply has not been affected.
It has established a new trading arm to take over CAO's jet fuel import
business.
