OW Bunker Executives Face Fraud Charges

CEO Jim Pedersen and his team, March 2014 (file image courtesy Nasdaq)

By MarEx 2016-03-04 20:41:18

The Danish Public Prosecutor for Serious Economic Crime has charged several former employees of the bankrupt firm OW Bunker with fraud, including former CEO Jim Pedersen and CFO Morten Skov.

Mr. Pedersen confirmed the charge to media, and contended that it was baseless.

The charges are reportedly related to the firm's failed subsidiary Dynamic Oil Trading, which reportedly cost OW Bunker $125 million in losses due to fraud, leading to its collapse.

Dynamic Oil official Lars Møller was also charged in connection with the loss. Former CFO Kimmie Goh was reportedly not indicted.

OW Bunker had all the trappings of a successful, growing firm just months before its failure. It issued an IPO in March of 2014 - rare in the bunkering business, a reflection of its significant size - and its share price rose just after. But the fraud at Dynamic Oil and a risk management trading loss of $150 million sank the company without warning over a two-week period beginning in late October of the same year.

OW Bunker filed for bankruptcy in November 2014 and its legacy has been an active field for litigation. Numerous bunkers suppliers and creditors have applied to the defunct firm's trustees for payment - and not just its trustees, but also its clients. Shortly after the bankruptcy, North of England P&I Association warned its shipowner members that they faced the possibility of being billed twice for the same bunkers, once by the physical suppliers of the fuel and again by the trustees and assignees of OW Bunkers. 

The liability for the cost of the bunkers is still in question. A test case filed by the owners of the tanker Res Cogitans, contending that OW Bunkers had not passed title to the fuel supplied and therefore lacked the right to pursue payment, is presently in the appeals process in British courts, North says.