Rogue Oil Trader Causes $320 Million Loss at Mitsubishi Corp. Unit

(Bloomberg) — Mitsubishi Corp. said a rogue oil trader at its Singapore unit lost $320 million in unauthorized transactions disguised as legitimate hedges for customers. The employee, a Chinese national working at Petro-Diamond Singapore Pte, has been fired and reported to police, Mitsubishi said in a statement, declining to name him. The trader, hired in November 2018 to handle oil business with China, “repeatedly” engaged in the unauthorized deals since January, disguising them to “look like hedge transactions,” the parent company said. A person familiar with the matter identified the trader as Wang Xingchen, also known as Jack Wang. Calls to Wang’s mobile phone wouldn’t connect, while a person who answered the phone at Petro-Diamond’s Singapore office said he has left the company. No other current contact details were available. A loss of $320 million would be less than one-tenth of Mitsubishi’s projected profit for the year. In August, the giant trading house, the biggest of Japan’s so-called sogo shosha, forecast full year net income of 600 billion yen ($5.6 billion). The oil market has a long and colorful history of trading busts. Metallgesellschaft AG suffered a $1.2 billion loss in 1994 when a hedging strategy failed. In 2004, China… continue reading

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