An altercation between Singapore’s Jurong Shipyard Pte Ltd (JSPL) and BNP Paribas over $50.7 million in foreign exchange losses is set to go to full trial after Singapore’s High Court halted BNPP’s petition to wind up JSPL.
Late last year, JPSL was hit by $258.7 million in unauthorised foreign exchange losses caused by its former director of group finance, Wee Sing Guan. The company managed to reach settlement with 10 of 11 banks but disputed the loss with BNP Paribas leading to the present court case (Profit & Loss, March 2008).
In a statement, Sembcorp Marine, the world’s second largest oil-rig maker and parent company of JSPL, said that Singapore’s High Court had “agreed with JSPL that the question whether BNP Paribas knew or ought to have known of Mr Wee’s lack of authority to carry out the unauthorised transactions raised factual disputes and was serious enough to merit a full trial. We are pleased that the High Court has agreed that there should be a full trial with cross examination.”
BNP Paribas, France’s biggest bank, says it will appeal the High Court’s decision.
The trial is likely to be followed closely by members of the foreign exchange community as it will provide insight into the dealings between an international bank operating in Singapore and a blue-chip Singapore government-linked client.
Sembcorp Marine is majority owned by SembCorp Industries, which in turn is 49% owned by the Singapore government-linked investment agency Temasek.