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Mitsui says its S'pore unit lost US$81m in naphtha
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singaporegal
Supreme |
22-Nov-2006 15:46
Yells: "Female TA nut" |
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All these rouge traders giving Singapore a bad name. |
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maxsyn
Veteran |
21-Nov-2006 23:34
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Mitsui says its S'pore unit lost US$81m in naphtha trading Mitsui & Co., Japan's second-largest trading company, revealed today that a cover up on naphtha transactions in a falling market by a trader at its Singapore subsidiary caused $81 million of losses. Agency reports said an internal investigation by Mitsui revealed that the 35-year-old rogue trader had hidden the losses, which as of Nov 17 represented about 10 times last year's profits at Mitsui Oil (Asia) Pte. Ltd. The unit trades more than half of all Asian naphtha, a product used as feedstock for petrochemical firms, said a Reuters report. Reuters said the losses, while just 3 per cent of parent Mitsui's forecast annual profit, prompted the firm to close all futures and derivatives positions across oil and petroleum markets at the unit, and recalled Singapore's most infamous trading scandal, in which Nick Leeson tried to hide mounting losses on Nikkei futures, eventually causing the collapse of Barings Bank. Takashi Yamashiro, deputy chief operating officer at Mitsui's energy business unit told a press conference earlier today in Tokyo: "The significance of MOA's existence has vanished as of today." A Bloomberg report quoted him as saying that Mitsui Oil had closed agreements to sell and buy naphtha, incurring the losses. All of the Singapore unit's other positions in crude oil and fuel products were being closed and it would assess whether to continue the business in Singapore, which employs 32 traders for futures and physical crude and products, said Bloomberg. Reuters said Mitsui's disclosure comes as volatile oil and commodities markets claim a host of victims, from US hedge fund Amaranth Advisors, which lost US$6 billion on U.S. natural gas earlier this year, to the US$94 million loss on metals futures at Samsung Corp.'s Hong Kong unit in mid-2005. The company did not name the trader in question, but said the trader had been working for Mitsui since 2001 and was the only person responsible for trading naphtha, according to Reuters. Mitsui has not fired him, said Reuters. Still, Mitsui said it saw no change in its net profit forecast of 300 billion yen ($2.54 billion) for the business year to March 31, 2007. Before the news, shares in Mitsui ended down 0.3 percent at 1,491 yen, while the main Nikkei average ended flat. |
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