Fraud could bankrupt huge Danish fuel firm

A Danish supplier of ship fuel, OW Bunker, said on Thursday it risked bankruptcy after discovering that fraud at its subsidiary in Singapore had cost it up to $125 million (100 million euros).

Fraud could bankrupt huge Danish fuel firm
Photo: Kasper Palsnov/Scanpix
The group said it had been informed about fraud committed by senior employees at Singapore-based Dynamic Oil Trading (DOT) on Wednesday, and that "preliminary findings suggest a potential loss of around $125 million [750 million kroner, ed.]."
In a subsequent statement, OW Bunker said the losses could push it into bankruptcy after it had failed to reach an agreement with banks to keep it afloat.
"For the time being, the financial impact cannot be assessed. However, it must be assumed that the group's equity is lost," it said.
Separately, a review of OW Bunker's risk management contracts revealed a mark to market loss of around $150 million rather than the $24.5 million announced on October 23.
The company's head of risk management, Jane Dahl Christensen, had been fired immediately after the losses were discovered, it said.
OW Bunker was valued at 5.33 billion kroner (716 million euros, $890 million) in May in what has been Denmark's second biggest IPO in the year to date.
At the time the largest Nordic bank, Nordea, told investors the ship fuel supplier's business model was "robust and scalable," Danish news agency Ritzau wrote.

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Maersk profits up as global supply chain disrupted

Danish shipping giant, AP Møller-Maersk, said Tuesday that profits were up sixfold in the third quarter as the coronavirus pandemic and global supply chain problems caused container prices to soar. 

Maersk headquarters in Copenhagen. The Danish shipping company posted hefty profits in the third quarter of 2021.
Maersk headquarters in Copenhagen. The Danish shipping company posted hefty profits in the third quarter of 2021. Photo: Niels Christian Vilmann/Ritzau Scanpix

“Maersk delivered record earnings” in the third quarter, chief executive Soren Skou said.

“In the ongoing exceptional market situation, with high demand in the US and global disruptions to the supply chains, we continued to increase capacity and expand our offerings to keep cargo moving for our customers.” 

Maersk said that its bottom-line net profit amounted to $5.438 billion in the period from July to September, compared with $947 million a year earlier.

Underlying, or operating, profit increased nearly fivefold to $5.859 billion and revenues jumped by 67 percent to $16.612 billion.

“Results in Q3 were driven by high freight rates in an exceptional market situation,” the group said.

Looking ahead, Maersk said it is sticking to its full year forecast for operating profit of 18-19 billion dollars. 

However, the ocean shipping division “is now expected to grow below” projected global container demand of between seven and nine percent this year, “subject to high uncertainties related to the current congestion and network disruption,” Maersk said.

“The current trading conditions are still subject to a higher-than-normal uncertainty due to the temporary nature of current demand patterns, disruptions in the supply chains,” it cautioned.

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