China Aviation Oil chief ordered to quit

Updated: 2007-02-07 20:47

BEIJING -- Jia Changbin has been ordered to resign from his post of general manager of the China Aviation Oil Holding Company (CAOHC) for his involvement in a scandal concerning the Singapore Exchange, for which he was found guilty by a Singaporean court in 2004.

The State-owned Assets Supervision and Administration Commission on Tuesday announced Jia's successor as head of the heavyweight jet fuel supplier as Sun Li, the former chief of the chemical and marketing business of the China National Petroleum Corporation.

Jia and his former deputy Chen Jiulin, who was also chief executive of CAOHC subsidiary China Aviation Oil (Singapore), were found to have failed to inform the Singapore Exchange of its massive losses of US$550 million from oil derivative trading.

Chen was sentenced to four years and three months in jail and fined 335,000 Singapore dollars (about US$207,443). He is currently serving his sentence in Singapore. Jia escaped imprisonment but was fined 400,000 yuan (about US$51,282).

"We will learn from the lesson of the Singapore incident, improve the governance of the parent company, tighten risk assessment and improve the company's performance," Sun told Xinhua.

Despite the shadow of the Singapore incident, the CAOHC still raked in US$7.22 billion in revenue last year, reporting profits of nearly US$128.5 million, Sun said.

The CAO (Singapore) has been restructured and resumed trading on the Singapore stock exchange after being suspended for 16 months.

British energy company BP and a subsidiary of Singapore's government-related investment company Temasek Holdings are the new shareholders of CAO (Singapore), but CAOHC still holds the majority share.

The news did not affect the CAO (Singapore) share price which closed at 1.040 Singapore dollars on Wednesday, the same as the previous day.

Established on October 11, 2002, CAOHC is one of the 159 centrally-administered large state-owned enterprises (SOE).

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