SINGAPORE : Singapore-based China Aviation Oil (CAO), which has sought court protection after a half-billion-dollar trading fiasco, has been hit with a third class-action lawsuit filed in the United States.
The law firm Christopher J Gray, P C said in a statement seen in Singapore on Tuesday it filed the suit before a district court in New York on behalf of clients who bought CAO shares between February 5 and November 30 last year.
It followed similar complaints filed in New York by two other law firms specialising in class-action lawsuits - Lerach Coughlin Stoia Geller Rudman Robbins, as well as Murray, Frank and Sailer LLP.
The three suits revolve around the failure of CAO and its Beijing-based parent company to disclose massive derivatives losses totalling US$550 million.
CAO, which sources jet fuel for China but is listed on the Singapore stock exchange, has asked the Singapore High Court to protect it from creditors seeking more than 250 million dollars from the company.
The court gave the company until January 21 to submit a restructuring plan while trading of CAO shares has been suspended since the scandal broke out in late November.
The US lawsuits similarly accuse CAO of issuing "false and misleading statements regarding the company's business and prospects" and "concealed material facts from the investing public."
They add that "as a result of the defendants' false statements, China Aviation shares traded at inflated levels" during the period in question.
The "false and midleading statements" also helped CAO's parent firm to complete the sale of a 20 percent stake, worth US$120 million while knowing the losses were coming, they charge.
Contrary to the company's prospectus, CAO did not have the necessary risk management controls in place for hedging and trading, they said.
The suit by the Christopher J. Gray law firm said any investor who wants to be the lead plaintiff should petition the court no later than March 7.
All three lawsuits do not mention specific damages sought from CAO.
CAO spokesman Gerald Woon said Tuesday the company has not been served legal papers so far.
"When we receive the papers, we will take the appropriate action," he told AFP.
The CAO financial scandal is the biggest in Singapore since rogue trader Nick Leeson bankrupted Britain's Barings Bank in 1995 after losing over one billion dollars on bond derivatives.
Leeson was given a jail term of six-and-a-half years and eventually served about half his sentence.
Meanwhile CAO is also facing a separate suit in Singapore from Indonesian investment group Satya Capital for allegedly backing out on a deal to buy its 20.6 percent stake in Singapore Petroleum Corp.
One of CAO's creditors - Standard Chartered Bank - has also filed a statutory demand for US$14.4 million. - AFP