China Aviation Oil Holding Co (CAOHC) has been fined S$8 million ($4.8 million) by Singapore’s central bank for selling shares in its Singapore unit a month before the unit, a jet fuel trader, collapsed last November.

CAOHC sold a 15 per cent stake in China Aviation Oil (CAO) (Singapore) Corp Ltd on October 20 – a month before the unit imploded from $550 million in derivatives trading losses in the city-state’s biggest trading scandal since the 1995 fall of Barings Bank.
The fine, which the Chinese firm has paid, is the first against a corporation under the central bank’s civil penalty regime for market misconduct, which was introduced last year. It is separate from ongoing criminal proceedings against CAO Singapore officials.
Analysts said global investors should take heart from Beijing’s swift response to the penalty – as more Chinese state entities seek overseas listings.
“It shows maturity on both sides and should go down well with international investors,” said Teng Ngiek Lian, fund manager at Target Asset Management. “China’s a big country, but it’s prepared to face the consequences and not renege on its responsibility.”
“For Singapore, it shows they have strong resolve,” Teng said.
Deutsche Bank AG arranged the share placement last October which raised S$185 million for the Beijing firm. The Monetary Authority of Singapore declined to say whether there were ongoing investigations into Deutsche’s role in the sale.