So much for saving airlines money through hedging. Here’s another rogue trader story:
SINGAPORE, Dec 21 (Reuters) – China Aviation Oil (Singapore) Corp Ltd, the jet fuel importer that nearly collapsed after losing half a billion dollars in trading last year, has fired its top two traders, the company said in a filing on Wednesday.
CAO said it had terminated the employment of Abdallah Kharma, head of its trading division, and Gerard Rigby, deputy head.
In a statement to the stock exchange, it also said it had fired Peter Lim, Head of the Finance Division, who is set to be tried along with suspended chief executive Chen Jiulin in March and April after Singapore’s biggest trading scandal in a decade.
Cindy Chong, Head of Banking Relations and Risk Management Division, had resigned, the company said.
China Aviation, with an ambitious Chen at the helm, engaged in more aggressive speculative oil trade than most other state-owned Chinese firms, traders say, eventually racking up $550 million in losses last year on wrong-way bets on oil prices.
The company has carried on its core business — sourcing international jet fuel for import to China, where its state-owned parent dominates the market for aviation fuel — but ceased all speculative trading after revealing the scope of its losses.
As part of a rescue package signed earlier this month, oil major BP will inject $44 million to buy a 20 percent stake in the firm, including the right to choose two BP executives to lead its trading and risk management divisions.