World's Largest Bunker Company Keeps CEO After Criminal Conviction
It is rare for a company with $10 billion in turnover to retain a CEO with a custodial sentence, but Danish trading house Bunker Holding - the largest bunker company in the world - has decided to keep a convicted chief executive and to accept its own sentencing on charges related to sanctions-busting.
Earlier this month, Bunker Holding, subsidiary Dan-Bunkering and Bunker Holding CEO Keld Demant were all convicted of charges related to supplying jet fuel to Russian intermediaries, who then resold the fuel for diversion to Syria. The deliveries were made during a period in which Russian and allied Syrian forces allegedly engaged in indiscriminate bombing in civilian areas of Aleppo, killing hundreds of non-combatants. The battle was a turning point in Syria's 10-year civil war, and its outcome hinged on Russian air support. At the time, EU sanctions prohibited fuel deliveries to Syria.
Prosecutors argued that executives at Dan-Bunkering and Bunker Holding, including Demant, were aware or should have been aware of the risk of diversion - but still signed off on 33 sales totaling 172,000 tonnes of jet fuel over two years. In the trial, it emerged that the firm's internal compliance controls had worked properly - Bunker Holding's chief legal officer flagged the sales and warned repeatedly that they risked violating EU sanctions - but traders overrode the warnings and approved the deals anyways.
The court agreed with the prosecution, finding that Dan-Bunkering should have "realized it was overwhelmingly probable" that the fuel would be used in the Syrian conflict and that such use would violate EU sanctions. It handed Bunker Holding CEO Keld Demant a four-month suspended prison sentence, and it sentenced Dan-Bunkering to a fine of nearly $5 million - plus an additional profit confiscation of $2 million.
Bunker Holding noted that only Dan-Bunkering was convicted of a deliberate breach of sanctions, and Bunker Holding and Demant were convicted only of negligence contributing to a breach of sanctions.
The penalty was unusually stringent for a white-collar crime case, according to observers. "It is not often that we see fines of that magnitude in Denmark," commented Prof. Thomas Elholm, a professor of criminal law at University of Copenhagen, speaking to DR. "And it is not every day that we see directors who are sentenced to imprisonment."
In a statement this week, Bunker Holding owner Torben Ostergaard-Nielsen - the head of Denmark's sixth-richest family - expressed his continued support for Demant and said that he would remain CEO. "Keld R. Demant has the full and unchanged supoport of the board of directors and the ownership and will continue as the CEO of Bunker Holding," Ostergaard-Nielsen said.
Ostergaard-Nielsen added that as the world's largest bunker company, Bunker Holding has "an obligation to take the lead in compliance and set the highest standards for ourselves."
Bunker Holding and Dan-Bunkering will accept the court's decision and will not appeal the ruling, said Klaus Nyborg, Bunker Holding's vice chairman.