Mitsubishi will shut down its Singapore-based crude oil and fuel trading units following an unauthorized trading fiasco that led to major losses.
Petro-Diamond Singapore registered a pre-tax loss of around $310 million after closing the trading positions, according to a statement, with the firm’s final debt totaling as high as $280 million.
Some of the oil and fuel trading activities will be imported back to Tokyo, said Mitsubishi’s chief financial officer, Kazuki Masu, during a results briefing this week, with some settlements to be executed in Hong Kong. The bank did not share details about affected staff from the shutdown of Petro-Diamond which houses around 50 employees in Singapore.
«Since it booked such a big loss, we could not reinvest in the same company and it's better to reinforce our management system,» Masu said.
Hit the Road, Jack
The alleged rogue trader’s $320 million loss – the first of its kind ever in Mitsubishi’s history – was discovered in September this year and led to investigations that discovered unauthorized derivative transactions disguised to look like hedges made since January.
The trader is named Wang Xingchen, or Jack Wang, and denied any wrongdoing in a statement issued through a lawyer. According to Masu, Mitsubishi has no contact with Wang or knowledge of his whereabouts except for the fact that he is outside of Singapore.
