Belgian Law Firm Says Contacted by OW Bunker Investors
Belgian law firm Deminor said it had been contacted by 15 to 20 investment firms considering legal action over the failure of OW Bunker, the world's largest shipping firm which filed for bankruptcy a week ago.
Deminor, which specialises in representing institutional investors in class actions against public listed companies, did not say on Friday which investors had contacted it and gave no further detail on possible actions over the company's collapse.
OW Bunker, Denmark's the third-largest company by revenue, said on Nov. 7 it filed for bankruptcy after an alleged fraud by unnamed senior employees in its Singapore subsidiary cost it at least $125 million and banks refused new credit lines.
The company listed as recently as March in the second-biggest stock market flotation in Denmark since 2010. South Korea's two major refiners are also considering legal action to recover losses tied to the company's collapse.
"When you go bankrupt ... months after an initial public offering (IPO), then it's a scandal," Jesper Langmack, head of PFA Asset Management in Copenhagen, which oversees 417 billion Danish crowns ($70 billion) and is one of Denmark's biggest asset managers, wrote in an email to Reuters.
PFA Asset Management, part Denmark's largest privately owned life insurance company PFA Pension, invested around 100 million crowns in OW Bunker at the time of its flotation.
"The confidence we, as investors, had in investment banks, management and private equity companies behind it (the IPO) has suffered a serious blow in this case," Langmack wrote.
Deminor partner Erik Bomans said other issues relating to OW Bunker's brief life as a listed company also raised questions.
The company had on Oct.7 cut its yearly profit guidance, then warned on Nov.6 that a risk management review meant further losses than previously announced could be expected.
The company had a policy of hedging its inventory and marine fuel transactions within an oil price range, but a 20 percent slump in crude prices since June broke the expected range.
"The company gave fluctuations in oil prices as explanation (for the profit warning) but when we look in the IPO prospectus they emphasise a lot they have unique risk management systems which allow them to keep the impact from fluctuating oil prices to a minimum," Bomans said.
Nordea, Carnegie and Morgan Stanley advised on the IPO. Nordea said in a statement: "We strongly believe that we have conducted a thorough and correct process assisting OW Bunker in the IPO process as book runner together with the two joint global coordinators."
Morgan Stanley declined comment. Carnegie could not be reached for comment.
(1 US dollar = 5.9673 Danish crown)
(By Ole Mikkelsen; Editing by Keith Weir and David Holmes)