Nov 1, 2007
Closing Out of Unauthorised Transactions
On 22 October 2007, SembCorp Marine (“SCM”) announced that its former Director, Group Finance, Mr Wee Sing Guan, entered into various unauthorized foreign exchange transactions (the “Unauthorised Transactions”) for the account of one of its wholly-owned subsidiaries, Jurong Shipyard Pte Ltd (“JSPL”).
On 25 October 2007, SCM further announced that pending the resolution by the courts of the issue whether the Unauthorised Transactions are binding on JSPL, SCM is working with the various banks to close out all the Unauthorised Transactions. These arrangements are without prejudice to SCM and the banks’ positions in relation to whether the Unauthorised Transactions are valid or binding on JSPL.
The Unauthorised Transactions were made with 11 banks. SCM has successfully negotiated the complete close out of all outstanding Unauthorised Transactions with these banks.
The outstanding Unauthorised Transactions have now been closed out. The loss from the Unauthorised Transactions is US$220m. This does not include the sum of approximately US$83m which JSPL paid to one of the banks before the Unauthorised Transactions were discovered. JSPL’s position is that the Unauthorised Transactions are not valid and binding and it is not liable for the loss.
In the light of the reasonable prospect of litigation and to enable SCM and JSPL to obtain legal advice with respect to possible claims, as well as any claims by JSPL, Drew & Napier LLC and PriceWaterhouseCoopers continue to inquire into all aspects of the Unauthorised Transactions. They have been given unrestricted access to all relevant material and personnel, and will report their findings to the boards of SCM and JSPL.
For media & analysts enquiries, please contact:
Judy Han (Ms)