China Aviation Oil refutes claims made by Swiss bank BCP

CHINA Aviation Oil (Singapore) (CAO) on Thursday called the allegations made against the company by Banque de Commerce et de Placements SA, DIFC Branch (BCP) "entirely unmeritorious and misconceived", and said that it has sought legal advice from a local law firm.

Last month, CAO was issued a writ of summons by BCP, in relation to a letter of credit in January that the latter had submitted on behalf of ZenRock Commodities Trading to finance its purchase of about 260,000 barrels of gasoil from CAO.

BCP paid CAO about US$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, court documents showed.

However, 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.

The Swiss bank also alleged that it had made payment under the letter of credit "as a result of mistake of fact induced by fraud".

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However, CAO on Thursday refuted that it had paid its seller for the cargo, and "presented confirming documents under the letter of credit to, and received payment from, the confirming bank of the letter of credit and not BCP". It also confirmed that the cargo had been shipped on board a vessel from Malacca on Jan 27 this year.

The mainboard-listed jet fuel trader announced that in consultation with its legal advisers Rajah & Tann Singapore LLP, it will "take such steps as may be necessary to vigorously resist and refute any and all of BCP allegations, as well as BCP's claim made against the company". 

It added that it "has been advised that there are good grounds to successfully defend BCP's claims".

CAO had originally intended to issue an announcement on BCP's claim upon receipt of its statement of claim - which was due to be filed and served to CAO on Aug 18

However,  after office hours on the day, BCP's lawyers sought an eight-day extension through CAO's lawyers to file the former's statement of claim by Aug 26.

Thus, "the board and management are of the view that it would now be proper and timely for the company to issue an announcement relating to the writ of summons ...  notwithstanding that the statement of claim had yet to be received," said CAO.

The company added that BCP's claim is not expected to have a material impact on its earnings per share and net tangible assets per share for the current financial year ending Dec 31 this year.

CAO shares fell S$0.03 or 3.35 per cent on Thursday to close at S$0.865.