Altor’s OW Bunker faces DKK 654m bankruptcy claim

The claim has been made against former CEO Jim Pedersen, as well as two members of the company's management team and two people in the top management of Dynamic Oil Trading – the OW subsidiary responsible for the loss that bankrupted the company.

According to Danish media reports, OW estate executor Søren Halling-Overgaard has said that so far there is no basis for making claims against OW Bunker's former board of directors, which includes Altor partner Søren Johansen.

In addition to the bankruptcy administrator's claim, 25 institutional investors in the company have put forward demands for DKK 803m in damages from OW Bunker's management, board, and several Altor employees and holding companies related to the group.

However, the investors say their demands have only been put forward as a formality, to avoid exceeding statutes of limitations for insurance claims against the company.

The two largest claimants are Danish pension funds ATP and PFA, which are demanding DKK 166m and DKK 164m, respectively. The third-largest claimant, Lærernes Pension, is demanding DKK 81m.

Altor's Tor Krusell told unquote" the GP was unable to comment until targeted by a formal claim.

Mounting evidence
The evidence against OW Bunker's management has been mounting through December, as a number of documents were leaked to the local press.

An email acquired by Danish newspaper JP Finans shows that CFO Morten Schou was informed on September 25, 2014 about the $97m credit extended by OW's Dynamic Oil Trading (DOT) subsidiary to Singaporean Tankoil Marine Services, which was overdue and would eventually bankrupt OW Bunker. By comparison, the second-largest credit extended by DOT stood at around $6m.

According to OW's risk management policies, any credit over $10m had to be approved by management and the board, though there has been no evidence so far to suggest Tankoil's credit line had been approved in this manner.

The same subsidiary, DOT, also figured in documents obtained by public broadcaster Danmarks Radio, which shows DOT prominently featured in a sales presentation that had been pitched to several trade buyers during 2013. However, when Altor chose to list OW Bunker the following year, there was no mention of DOT in the IPO prospectus.

Heavy criticism has also been levelled at the company's Internal Risk Management (IRM) division, which some investors claim was not adequately described in the IPO prospectus. Documents show that as much as 73% of OW Bunker's profit was generated in IRM in 2010 through oil price speculation.

An email from adviser Morgan Stanley to Altor partner Søren Johansen shows Goldman Sachs requested more clarification on the function of IRM while acting for a trade buyer during negotiations surrounding a potential sale.

OW Bunker is also facing a scandal in Italy, where the Italian financial police have put out an arrest warrant for a director at subsidiary OW Supply. The company has been accused of defrauding the Italian navy of €7.4m, taken in payment for fictional oil deliveries made by a vessel which no longer existed, having sunk the previous year.

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• Topics
• Nordics
• Investments
• GPs
• Altor
• Morgan Stanley
• Goldman Sachs
• OW Bunker