Manifold Times was present at the BP Singapore bunker trial on Tuesday. The following report is part one (of two) focusing on submissions from Clarence Chang and Koh Seng Lee’s defence attorneys; part two which covers submissions from the public prosecutor will be published in a separate article on 9 August.

Submissions of the prosecution and defence were the main focus of Tuesday’s trial involving former BP Singapore Regional Marine Manager Clarence Chang and Koh Seng Lee, the sole shareholder and executive director of Pacific Prime Trading (PPT), at the State Courts of Singapore.

Chang was facing 20 charges for allegedly accepting bribes totalling USD $3.95 million from Koh between the period of July 31, 2006 and July 26, 2010.

Defence submissions of Koh Seng Lee
Chelva Retnam Rajah, Partner of Tan Rajah & Cheah, who represents Koh explained there was no “obvious advantage” for his client to participate in such an activity.

He said PPT participating in a back-to-back arrangement with BP, where PPT buys bunker fuel oil from BP, bore the risk of fluctuating oil prices.

“In coming to this arrangement BP cushioned themselves completely from the risk of price fluctuations,” says Rajah.

“Now, the allegation is that this back-to-back arrangement was to PPT's obvious advantage but what was this obvious advantage?

“That has not been spelled out because if BP read the market wrongly it was PPT that will be exposed to fluctuations in oil [prices].”

Rajah moved on to address evidence found from the Function for Approval Department of BP, which pointed out Chang offered advantages to PPT due to it being the oil major’s biggest counterparty.

“If that biggest counterparty does not know its business and doesn’t trade properly he will not get the biggest advantage [instead] he will get biggest losses as the counterparty is taking all the risk and there was no obvious advantage in this arrangement that gives you the opportunity to make a lot of money and also opportunity to lose a lot of money,” he said.

“Mr Koh was prepared to do that. Why was he selected in the first place? Mr Koh got the opportunity as he has been long in the business and he was given the opportunity as he was able to run the business successfully.”

Rajah also questioned the alleged bribes which Chang received from Koh, as the first bribe was paid to Chang in July 2006 – five years after PPT started business with BP in 2001.

“In those five years not a single dollar was paid to Clarence [Chang] if this was a plan from the start as alleged by the prosecution then one would have thought the reasonable time to withdraw payments [for inducement for business from 2001] but the payments started in 2006 and that scenario does not fit,” he says.

Rajah further noted PPT’s profit and loss accounts from 2005 to 2009 showed Koh paid Chang more than what the company earned during the period. Overall, BP was the entity which ultimately gained from commercial dealings between Chang and Koh.

“Finally, has BP suffered any loss on these transactions? No! In fact, it has achieved risk free oil deals and in those circumstances we submit to the first accused [Koh] that the essential elements of the crime and charge relating to the money paid to advance the interest of PPT and BP, and these monies were paid with corrupt motive, as not been brought out by any of the evidence.” he said.

Defence submissions of Clarence Chang 
Andre Maniam, Senior Counsel at WongPartnership, presenting Chang highlighted the prosecution may want to reframe charges against his client due to his employment status with BP during certain dates.

According to him, Chang was “charged in 26 July 2010 in Singapore being an agent of BP marine fuels”.  However, Chang was neither an employee nor an agent of BP after 9 July 2010 as he has already left the company.

“The problem is […] much more fundamental. Does this even fit into the case theory? After he left BP, he corruptly obtained gratification from someone he is not employed with. There is no evidence as there is none,” he said.

Maniam pointed out the prosecution’s portrayal of Chang allegedly taking a share of PPT profits as flawed because “a share of PPT profits cannot be more than PPT’s profits.”

“As in the prosecution’s case these were bribes. Mr Rajah says these bribes doesn’t make sense as in the first year Mr Koh was giving away almost all the profits [of PPT]. By March 2008 to March 2010, he had given more than what his business makes.”

Maniam further questioned the reliability of BP bunker trade data being used against his client due to the selective omission of marine gas oil (MGO) sales figures from Malaysia and non-Singapore ports.

“So what if PPT was the largest counterparty? Is it a reasonable reason to believe there was corruption? There was no evidence. If Koh was not good at what he did, he did not deserve the volumes being transacted with him. The fact is BP continued to transact with PPT some five years after Clarence Chang left,” he says.

“It is entirely unsafe to draw if PPT was the largest counterparty and if the share increased then there must be corruption.”

Chang’s suggestion to use Vermont UM Bunkering as an additional counterparty for BP, when PPT was not performing well in 2009, also went against the nature of his role in the case, Maniam said.

“Clarence Chang was getting money from Mr Koh supposedly to keep PPT business with BP going on and he was not getting anything from Vermont. Instead of doing supposedly what he was bribed to do, he brings in a new party where Mr Koh has a share and he gets nothing from Vermont,” said Maniam. 

“It all doesn’t make sense. It only makes sense in the prosecution’s case theory if he kept Vermont out of it and he maximised PPT as he was bribed to do.”

Related: BP Singapore bunker bribery case update: BP bunker trade data in question
Related: BP Singapore bunker bribery case update: CPIB officer takes to the stand
Related: UPDATE: BP Singapore bunker bribery case
Related: BP Singapore bunker bribery case continues

Photo credit: Manifold Times
Published: 8 August, 2018