Trader accused of causing $320m loss to Mitsubishi’s PDS business denies guilt
The trader claims “he had not engaged in unauthorized trades in crude oil derivatives,” according to a report by the Nikkei Asian Review.
Shortly after Mitsubishi Corporation confirmed that its subsidiary Petro-Diamond Singapore (Pte) Ltd. incurred a loss due to the trades conducted by one of its employees, the trader in question has sought to dismiss the accusations.
According to a report by the Nikkei Asian Review, the trader, Wang Xingchen, maintains “he had not engaged in unauthorized trades in crude oil derivatives”. The information was provided by the trader’s attorney Joseph Chen. The trades “had been reviewed by PDS’ financial team,” the attorney’s statement said, adding that “the losses were not caused by him but by Mitsubishi’s decisions.”
Last week, Petro-Diamond Singapore (Pte) Ltd., which engages in the trade of crude oil and petroleum products, said that it expects to book a loss of approximately USD 320 million from its trade of crude oil derivatives.
The loss stems from the trades of an employee who was hired locally by PDS to handle its crude oil trade with China, the company said on September 20, 2019. The employee was discovered to have been repeatedly engaging in unauthorized derivatives transactions and disguising them to look like hedge transactions since January of this year. Because the employee was manipulating data in PDS’s risk-management system, the derivatives transactions appeared to be associated with actual transactions with PDS’s customers.
PDS terminated the employment contract of the rogue trader on September 18, 2019. The company also filed a police complaint against the employee a day later.