The trial of former BP Singapore Regional Marine Manager Clarence Chang continued at the State Courts of Singapore on Thursday.

Chang was facing 20 charges for allegedly accepting bribes totalling USD $3.95 million from Koh Seng Lee, the sole shareholder and executive director of Pacific Prime Trading (PPT) between the period of July 31, 2006 and July 26, 2010.

Theresa Zapiecki, BP’s Regional Compliance Director, Global Oil Eastern Hemisphere, Ethics & Compliance – Integrated Supply and Trading took to the stand to testify that Chang breached the oil major’s Code of Conduct and Global Trading Guidelines.

Deputy Public Prosecutor Jiang Ke-Yue told Zapiecki to elaborate on BP’s stand on the conduct of Chang who was suspected of setting up PPT with Koh and positioning the company to be the approved counterparty of BP Singapore.

“Under the BP code of conduct this is a conflict of interest and should be disclosed to the line manager, with legal and compliance getting involved for litigation,” she told the court.

“If Chang had gone to his line manager and disclosed the development prior to setting up the company [PPT], his line manager would have engaged compliance and legal as a minimum to define boundaries to mitigate conflict of interest; perhaps removing some job responsibilities around the counterparty or even not including the firm [PPT] as trading partner.”

Zapiecki further explained that if BP had found out about Chang’s alleged role in PPT after its creation, the oil major would have suspended him pending internal investigations.

An investigation report would have been presented at an internal disciplinary hearing; specially citing the Code of Conduct, a decision will have been made around misconduct with penalty being in the range from suspension or warning letter to termination.

According to Zapiecki, the Integrated Supply and Trading arm of BP which Chang was previously employed at is the only section in BP which is involved in physical trades; this exposes him to a different risk profile that requires him to follow additional compliance covering market manipulations, unfair trading activities, anti-competition rules, and collusion in trading behaviour and business communications. 

Chang voided compliance when he sent an internal message to Koh suggesting certain trading instructions.

The alleged instructions recommended PPT to trade 250,000 mt of bunkers per month, and “pass all terms with good pricing to BP first for spot trading at MOPS flat or 500 cSt plus two.”

Information gained from the instructions allowed BP to know how much PPT intends to purchase and could create a preferable trading environment to be used to inflate the price; it also discloses the margins and costs of BP, notes Zapiecki.

BP’s Code of Conduct was also violated when Chang recommended Koh to invest in his wife’s business, resulting in Koh investing SGD $500,000 for Mindchamps City Square between 2009 to 2010.

“If BP found out about this, he will have been put into suspension and investigations kicked off,” she says.

“A review of business communications, interviews to determine what Code of Conduct and Trading Guideline violations will have been made to check if he violated employment contract guidelines.

“If found, the penalty could range from warning letter to termination.”

The next trial at the State Courts of Singapore is scheduled for 24 July.

Related: BP Singapore bunker bribery case continues

Photo credit: Chensiyuan / CC BY-SA 4.0
Published: 12 July, 2018