COPENHAGEN (Reuters) - A Danish high court has increased the prison sentence for a former manager of OW Bunker’s Singapore arm to five years, after prosecutors appealed against the original 18-month sentence for actions that contributed to the marine fuel supplier’s collapse.
OW Bunker filed for bankruptcy in 2014 just eight months after listing in Copenhagen, partly due to losses on an estimated $120-$130 million credit line given by its Singapore-based arm to small local company, Tankoil Marine Services.
Last year, a Danish city court found Lars Moller, former head of the Singapore subsidiary Dynamic Oil Trading, guilty of approving credit beyond his mandate, hastening the collapse of OW Bunker - then the world’s leading supplier of bunker fuel.
Moller had also appealed against the 18-month sentence, seeking to have it overturned. [nL5N1T13FB]
“This is a big shock and the outcome is a very big negative surprise,” one of Moller’s defence lawyers, Arvid Andersen, told Reuters after Friday’s court decision.
The Western High Court said the former manager had been found guilty of very gross breach of trust involving a large sum of money, significantly contributing to OW Bunker’s bankruptcy.
“The defendant was continually informed about the problems with Tankoil without reacting, while during the whole period incorrect and misleading information was given to the management of OW Bunker with the defendant’s knowledge,” the court said in its verdict.
The 2014 bankruptcy sent shockwaves through the global shipping industry and left investors and business partners scrambling to cover their losses.
Hedging losses of almost $300 million at OW Bunker’s Danish headquarters also contributed to the collapse, a marked change of fortunes for a company valued at $1 billion when it listed in March that year.
Reporting by Stine Jacobsen and Jacob Gronholt-Pedersen; Editing by Mark Heinrich and Mark Potter