TOKYO (dpa-AFX) - Japanese conglomerate Mitsubishi Corp. (MBC.L, MSBHY.PK) said Friday that a trader at its Singapore-based unit has lost US$320 million through unauthorized transactions in crude oil derivatives.
The employee, who had been hired by one of its subsidiaries Petro-Diamond Singapore to handle its crude oil trade with China, made a series of unauthorized trades starting in January this year. The employee was manipulating risk management systems to make the transactions look legitimate, Mitsubishi said. But the losses on those trades increased after crude oil prices started falling sharply in July.
Petro-Diamond Singapore began investigating the employee's transactions during his absence from work in the middle of August, and that is when the unauthorized transactions were discovered.
The Japanese company said that losses from the transactions could rise further.
'Although PDS has already closed the position in question and determined how much was lost on the underlying derivatives, we are now examining the total amount of losses,' it said.
Mitsubishi said after recognizing that the transactions being investigated could result in a loss for the company immediately consulted with an outside lawyer and established an investigation team to gain an overall picture of the situation and identify the causes.
Petro-Diamond Singapore terminated the employment of the employee on September 18 and lodged a police complaint against the employee on September 19, Mitsubishi said.
Copyright RTT News/dpa-AFX
© 2019 AFX News
