A founder and director of collapsed oil trader Zenrock Commodities, and his co-conspirator, were charged in court on Friday (July 8) for offences involving more than US$105 million.

Singaporean Xie Chun, 45, Zenrock’s ex-president and director, and Chinese national Zhang Taiming, 32, its ex-operations executive, were both slapped with four charges: two of cheating, and one each of forgery and criminal breach of trust.

Investigations by the Commercial Affairs Department revealed that sometime between February and March 2020, the duo allegedly used forged documents to deceive the Bank of China’s Singapore branch of a sum of US$54 million..

The men allegedly deceived the bank into believing that Zenrock had entered into a contract to sell a cargo of oil to French oil trader Total Oil Trading. This induced it to issue an irrevocable letter of credit for up to US$54 million in favour of Shandong Energy International (Singapore), according to charge sheets seen by The Straits Times.

Shandong was part of a series of round-tripping contracts, where sales and profits were inflated by selling the same commodity between various parties to create fake trading volume.

Both Xie and Zhang are also alleged to have dishonestly re-assigned to the Bank of China proceeds from a sale of cargo oil that it had charged to HSBC (Singapore).

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

They are also accused of cheating Credit Agricole Corporate and Investment Bank’s Singapore branch of US$17 million. The bank was deceived into believing that Zenrock had agreed to sell a cargo of oil to Total Oil Trading, and therefore issued an irrevocable letter of credit in favour of PPT Energy Trading – another player involved in the round-tripping transactions.

Zenrock was founded here in 2014 by a group of veteran oil traders including Xie, who was formerly from Chinese oil trading giant Unipec.

Xie was offered bail of S$500,000 while Zhang was offered bail of S$50,000.

Their cases have been adjourned for a pre-trial conference on Aug 17.

If convicted, the men face up to 10 years’ imprisonment and a fine for each of the cheating and forgery charges. The criminal breach of trust charge carries a jail term of up to seven years, a fine, or both.

Zenrock was placed into judicial management in May 2020 with debts of more than US$600 million.

It is one of many high-profile traders to collapse in 2020, alongside Singapore’s Hin Leong Trading, following a crash in oil prices during the Covid-19 pandemic that exposed hidden financial troubles and wrongdoings. Hin Leong founder Lim Oon Kuin, also known an OK Lim, faces 130 charges of cheating and forgery. THE STRAITS TIMES