A trader fired by Mitsubishi in Singapore for allegedly losing $320m through failed bets on the oil price says none of his transactions were unauthorised and the losses were a result of decisions the company made, according to his lawyer.
“Our client takes the position that he had not engaged in unauthorised trades in crude oil derivatives,” said Joseph Chen, the lawyer representing the trader — Wang Xingchen, also known as Jack Wang — in a statement on Wednesday.
Mr Wang was in charge of crude oil transactions with China at Mitsubishi’s subsidiary Petro-Diamond Singapore. According to the company, he repeatedly carried out unauthorised trades and disguised them to look like hedges for transactions with customers.
Mr Chen said that Petro-Diamond Singapore had internal controls in place at the time and that the trades had been reviewed by the company’s financial team. “The losses were not caused by him [Mr Wang] but by Mitsubishi’s decisions,” said Mr Chen.
In a statement last week that did not identify Mr Wang, Japan’s biggest trading house said that one of its employees had been taking unauthorised derivatives positions since January and suffered huge losses when the oil price fell in the summer.
“Our understanding of the facts is exactly how we described in our statement to the press, and we have every intention to give the authorities our complete co-operation,” Mitsubishi said on Wednesday in response to Mr Chen’s statement.
Mitsubishi closed out all the trader’s positions in mid-August, when the price of Brent crude was at lows beneath $60 a barrel, missing out on the September price surge after half of Saudi Arabia’s export capacity was knocked out by a drone attack.
The company began to investigate the employee’s transactions when he was absent from work in August and discovered the allegedly unauthorised trades. Mitsubishi last week said it had sacked the employee and reported him to authorities.
The Singapore police did not immediately respond to requests for comment on Wednesday.
Mr Chen said Mr Wang took holiday in August and later informed his employer he was on medical leave. “He did not return to the workplace because he was afraid for his own personal safety,” said Mr Chen, adding that Mr Wang “did not abscond from his workplace”.
Mitsubishi has said it is checking whether there are further costs related to the transactions, but the scale of the loss is not expected to rise significantly.
This is not the first time a Japanese trading house has run into trouble in Singapore. In 2007, Mitsui & Co lost $81m at the hands of a naphtha trader in its local oil unit. Naphtha is a liquid hydrocarbon mixture. In that case, the trader was sentenced to jail for falsifying accounts and Mitsui ended up shutting down its Singapore oil trading operation.