Swiss bank BCP alleges fraud in oil deal between ZenRock and China Aviation

Banque de Commerce et de Placements SA, DIFC Branch, has sued China Aviation Oil (Singapore) Corp Ltd over an alleged fraudulent deal as the Swiss bank seeks to reclaim the $19 million it paid to CAO for a cargo, a court document showed.

In a writ of summons filed to the Singapore High Court, BCP said it issued a letter of credit in January on behalf of ZenRock Commodities Trading Pte Ltd to finance its purchase of about 260,000 barrels of gasoil from CAO.

CAO is the largest jet fuel trader in Asia and is majority owned by a Chinese state-owned company.

Singapore-based ZenRock had intended to sell the cargo to PetroChina International (East China) Co. Ltd, BCP said.

CAO and KMPG, ZenRock’s interim judicial manager, declined to comment. BCP and its lawyer did not respond to emailed requests for comment.

PetroChina did not immediately respond to an emailed request for comment.

ZenRock was placed under interim judicial management (IJM) in May after one of its creditors HSBC Holdings PLC alleged that it engaged in a series of “highly dishonest transactions”.

BCP paid CAO about $19 million in March after the seller presented documents to show that the cargo had been loaded onto a tanker in Malacca, Malaysia, and that ZenRock had taken delivery, according to the court document.

BCP said CAO’s “representations were in fact false in that, no cargo was shipped and/or delivered pursuant to the CAO-ZR contract”.

By presenting the documents, CAO “had acted in breach of the letter of credit”, BCP added.

BCP has claimed damages and interest on top of the amount it paid for the cargo, according to the document.

A hearing for the case is scheduled for Sept. 2.

By Florence Tan

—GH Extractives