Singapore police arrest CAO executives
by Brian Turner
Police in Singapore arrested the chief executive of China Aviation Oil, the state-owned jet fuel importer.
They also arrested four executives of CAO’s Beijing-based parent company, China Aviation Oil Holdings.
All are held on charges that they hid losses related to oil derivatives trading.
There were additional accusations that they participated in insider trading that resulted in Singapore’s biggest market scandal since 1995.
This is believed to be the first time that charges have been brought against executives of a state-owned Chinese company in another jurisdiction.
The fact that Singapore has filed charges in this case is expected to raise the confidence of investors concerning the accountability of state-owned Chinese companies and their subsidiaries that are listed overseas.
The arrests came just before creditors approved a plan to restructure CAO’s debt, which could allow Chinese Aviation Oil Holdings to enter a joint venture with Singapore state investment company Temasek Holdings which would put $50 million into CAO in exchange for a minority share.
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