Editor: An alert reader highlighted to Manifold Times certain portions of the article mentioned Pacific Prime Trading as ‘PTT’ which is the incorrect company name. Corrections were made on Saturday (4 April) to reflect the proper company name of PPT.
Manifold Times was present at the BP Singapore bunker trial on Wednesday (1 April). The following report represents a summarised extract of the morning’s trial:
The BP Singapore bunker trial continued on Wednesday (1 April) at the State Courts of Singapore where legal representatives from the prosecution and defendants presented their summary submissions to the Judge.
Ex-Regional Marine Manager of BP Singapore Clarence Chang and the sole shareholder and Executive Director of Pacific Prime Trading (PPT) Koh Seng Lee each faced 20 charges related to alleged bribery and corruption offences.
Summary submissions of Deputy Public Prosecutor:
Jiang Ke-Yue, the Deputy Public Prosecutor (DPP) acting for the Corrupt Practices Investigation Bureau (CPIB), presented statements to the court to prove the charges.
He claimed mutual arrangements were present for the setup of PPT as a trading party of BP Singapore, and payment with corrupt intent was involved.
“Beyond establishing mutual understanding, they [Chang and Koh] also flashed out the conditions when the payments will be made,” he told the court.
“It can be showed from Mr Chang’s statement that he viewed it as an entitlement as co-owner and shadow director of PPT and got a share of profits as PPT prospered. This showed the payments had an influence before that of BP Singapore and establishes that with corrupt intent.
“For Koh, he viewed the payment as the requirement. Mr Chang was in a position to make or break PPT’s position with BP Singapore. There are various times when he followed Mr Chang’s request in order to keep the relationship with BP Singapore intact. He even went so far to say whatever Mr Chang asked – he will give.”
Jiang further suggested the claims of Chang and Koh of inaccurate CPIB statements were “lies”, which led to Chang and Koh changing their defence in 2015 by introducing the alleged bribes as payments for joint investment.
“These affect their credibility. In particular, Koh’s allegation that he lacked proficiency in English which is unconvincing […] which leads one to wonder if his testament in court is just an elaborate act,” he alleged.
Jiang pointed out an overconcentration of risk in PPT as the company’s trading volume to BP passed the 50% mark in 2009 and increased to between 60 to 65% in 2010; in turn, approximately 90% of PPT’s business was from BP Singapore.
He further said Chang also gave PPT preferential treatment by sharing trading information with Koh which is a breach of BP’s global trading guidelines.
In addition, a netting agreement between PPT and BP Singapore was “not properly implemented as it should be”.
The defence’s claim of Koh’s payment to Chang exceeding the net profit of PPT for some years cannot be relied upon as Koh had shown he did not fully share his financials to the court, said Jiang.
“If he wanted to use this evidence he need to show his full financial interest. Unfortunately it was shown he lied when we later uncovered the trust deeds when we were in court. His explanation did not stand up to scrutiny,” he said.
“We submit we have proven our case beyond reasonable double and we conduct they [Chang and Koh] are both to be convicted for the 20 charges they face respectively,” ends Jiang.
Defence submissions of Koh Seng Lee:
Chelva Retnam Rajah, Partner of Tan Rajah & Cheah, who represents Koh alleged there is no causal link in between payments made to Chang (the funds transfer and the MindChamps agreement) with PPT’s appointment as a counterparty to BP Singapore.
“The fact that PPT was appointed in 2001 and the first payment was made on 31 July 2006 was more than five years and payments made after when Chang left shows there is no causability,” he said.
Rajah explained Chang could not make or break PPT, even though Koh said so in his CPIB statement.
“There is no evidence that Chang threatened to make or break PPT,” said Rajah.
“Chang left BP on 9 July 2010 and Koh continued as a counterparty to BP for five more years, and PPT profits are highest after Mr Chang left BP in the year ending March 2011 and next highest was in the year ending March 2012.”
In regard to the netting agreement, Rajah explained PPT had a significant volume of marine oil trades with BP and it was “quite normal” for PPT to have a netting agreement. The netting agreement between PPT and BP Singapore was also not conducted during Chang’s tenure with BP Singapore.
“Secondly, there is no evidence this [netting agreement] was only done for PPT and not for other counterparties,” he adds.
“There was no evidence this method of payment, by means of netting agreement carried out, offer any benefit to PPT.”
Rajah, meanwhile, stated the reason of PPT becoming the largest counterparty of BP Singapore was through its own merit.
“PPT became the largest counterparty on its own merits. PPT offered good performance which recognised by BP that was why PPT remained as the largest counter party,” he suggested.
“As far as Mr Koh himself concerned, the fact he was buying the biggest volume from BP doesn’t mean he makes money, the more he buys the bigger his risk […] BP was passing along the risk to Mr Koh,” he said.
An SMS sent by a BP colleague under the instruction of Chang to get Koh to buy BP’s oil at its lowest levels “has been inflated to enormous proportions simply because the prosecution has no other evidence,” stated Rajah.
“Mr Chang’s explanation is that he recalled the market was depressed and this meant it was cheaper for shipowners to buy ex-wharf to buy oil from others and he had problem moving this oil and wanted Mr Koh to take up volume so he can keep BP oil stock moving,” he explained.
Another SMS where Chang said: “Our oil coming in tomorrow sell as much as possible before premium collapse” cannot be regarded as a breach of confidentiality as this was information Koh already knew beforehand as PPT had two programmers stationed at the BP office, noted Rajah.
“Singapore’s monthly bunker sales is at approximately 3 million mt per month and this one shipment of 80,000 mt cannot affect the premium. If it can, this means every time a tanker comes in the premium collapses – there can’t be such evidence.”
The total USD 4.244 million Chang received from Koh was 94% the total amount of PPT’s profit in the year ended 31 March 2011 from the time of its incorporation, said Rajah.
“It just beggars reason they will have paid so much [at] 94% to get alleged benefits from Mr Chang which do not exist.”
The trust deeds of Koh’s involvement in three other bunkering firms, namely United Maritime, Sino International Shipping, and Sino Tanker, are also not related to the current court case.
“That is not what Koh is charged with; it is as simple as that […] charges are for interest in PPT and PPT alone. These three companies were never in the mix,” he argued.
Koh’s proficiency in English, a language which he used in his CPIB statement, was basic at best, explained Rajah.
“He has a rudimentary understanding of English but because Koh was dealing in oil trades he was familiar with the terms of the trade. The court should understand it is not recommended for the court to use statements against him for language he is not comfortable with.”
The source of funds transferred from Koh’s overseas business remains unchallenged, highlighted Rajah.
“There is also no dispute Koh had the spare cash to invest in these properties. He put these monies in the hands of a trusted friend and left it for him to manage.”
Defence submissions of Clarence Chang:
Andre Maniam, Senior Counsel at WongPartnership, representing Chang noted the payments made by Koh to Chang started five years after PPT was appointed a trading partner of BP Singapore.
“It is inherently unbelievable if there were such a mutual arrangement that there will be a five-year gap before Mr Koh paid Mr Chang anything. Why wait five years and then make a substantial first payment of USD 300,000?”
Payments by Koh to Chang, which was almost all the amounts made of PPT profits, also does not make sense.
“The truth is that these monies were not brides to advance PPT interest after all, but because of some other arrangement between Koh and Chang; but they were not bribes.”
Chang’s perspective of why PPT was given more business was simply because the company was doing a good job. Further, BP Singapore still kept the most profitable trades for itself without them being passed to Koh, alleged Maniam.
“The evidence shows BP was quite welcoming to parties wanting to do business with them […] evidence from other witnesses was Koh did not come across as frightened of Chang. To the contrary, PPT was important to BP business and it was not under threat of being sacked.”
Maniam added it was undisputed other trading counterparties of BP Singapore encountered trading difficulties due to quality, barges, issues with licenses, and more – resulting in PPT continuing to be BP’s largest trading counterparty for some time.
“Essentially the prosecution is saying, because you are successful there must be corruption somewhere. The evidence suggests that PPT deserved its success because it was prepared to use double-hull barges, adopt to BP requirements, and over time its business grew,” he said.
Maniam stressed the prosecution’s case has been focusing on two SMSs that are forwarded to Koh which they claimed is a breach of confidentiality.
“If Mr Koh already knew it, there is no confirmation of any leakage of confidential information. As for the good pricing SMS Mr Chang explained his position to CPIB that it was normal business strategy to look after its biggest and best customer first,” he said.
In regard to Koh and Chang’s joint investment, Maniam suggested the burden still remains on the prosecution to proof that both are guilty beyond reasonable doubt.
“It is not enough for prosecution to point to deficiencies in the defences’ account on joint investment and they have to proof that these are all bribes,” he says.
Final Reply by Deputy Public Prosecutor:
Before the final close of the court session, DDP Jiang read out selected passages from Koh’s and Chang’s respective CPIB statements.
“When asked [by CPIB] about payment to MindChamps, Koh [in Mandarin] replied: ‘I did not keep track, whenever Clarence ask me for money I will have to give him’,” said Jiang.
“When asked [by CPIB] to elaborate the fact of why Koh did not want to offend Mr Chang, Koh replied: ‘In the beginning in 2004 when Clarence invited PPT to be counterparty I had the feeling he had full authority of marine counter sales […] to favour PPT to the extent of giving all the deals. I understand Clarence had the power to make or break [PPT].’”
Jiang further shared Chang’s version of the CPIB statement, where he said: “Koh took my suggestion to set up PPT. While it was not stated in black and white, there were mutual understanding that I will help PPT. This was win-win for PPT and BP.”
The DPP states: “The case is established vis the [CPIB] statements if the defence suggests otherwise […] unless your honour believes on the joint investment.”
District Judge Ong Chin Rhu decided to adjourn the session after hearing respective summary submissions of the Prosecution and Defence due to more time being needed to consider the submissions; the next hearing has been scheduled to take place in late June 2020.
Editorial coverage by Manifold Times regarding earlier court sessions of the BP Singapore bunker trial are organised in descending chronological order (latest to earliest) below:
Related: BP Singapore bunker trial: Last minute evidence surfaces at State Courts
Related: BP Singapore bunker trial: Former Ops Manager cross examined
Related: BP Singapore bunker trial: Cross examination of ex-Regional Marine Manager starts
Related: BP Singapore bunker trial: Former Market Manager takes to stand as witness
Related: BP Singapore bunker trial: Pacific Prime Trading Director cross examination continues
Related: BP Singapore bunker trial: Pacific Prime Trading Director undergoes cross examination
Related: BP Singapore bunker trial: Prosecution and Defence present submissions (Part 2)
Related: BP Singapore bunker trial: Prosecution and Defence present submissions (Part 1)
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: 3 April, 2020
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