Legal

Former Aegean Directors and Officers face $300 million lawsuit

Defendants allegedly neglected duties, leaving Aegean’s former CEO, Dimitris Melisanidis, free to defraud firm.

Published

6 years ago

September 23, 2019

Admin

The former Directors and Officers of the now defunct Aegean Marine Petroleum Network Inc. are facing a lawsuit exceeding US $300 million at the United States District Court for the Southern District of New York over alleged misconduct.

A complaint has been filed by a Trustee of the Aegean Litigation Trust representing several creditors against E. Nikolas Tavlarios, Peter C. Georgiopoulos, John P. Tavlarios, and George Konomos on 12 September at the U.S. court.

“Defendants, former directors and officers of Aegean, had duties to oversee Aegean’s business, including duties of care, loyalty, and good faith that required monitoring its systems of internal control, insider transactions, and financial dealings,” stated the complaint seen by Manifold Times.

“However, Defendants knowingly abdicated these duties, leaving Aegean’s former CEO, Dimitris Melisanidis, free to defraud Aegean and manipulate its finances without any monitoring, oversight, or scrutiny.

“In bad faith dereliction and breach of their duties, Defendants turned their heads as Melisanidis essentially had his way with the Company and rendered it hopelessly insolvent.”

The document claimed Melisanidis ultimately misappropriated over $300 million from Aegean by 2018.

Melisanidis first led Aegean to engage in a “sham consulting contract” with OilTank Engineering and Consulting, Ltd (OilTank), an entity owned by him, which resulted in amounts totalling between $68 million and $126 million paid for consulting services in an over budgeted construction project.

He later transferred approximately $186 million between Aegean and OilTank or other firms controlled by himself after construction was completed.

Melisanidis further engineered a massive accounting fraud whereby Aegean accumulated $200 million in fake accounts receivable between 2015 and 2017 from sham entities affiliated with his associates.

He also purported to sell his approximately 22% stake in Aegean for approximately $100 million, where the company never actually paid for the shares.

“Defendants were officers or directors of Aegean during each of these events — all of which resulted from Defendants’ failure to monitor Aegean’s systems of internal control, insider transactions, and financial dealings,” continued the complaint.

“Defendants were all aware of numerous irregularities and other red flags during their tenure, yet they did nothing to prevent Melisanidis from using his position to denude the Company of value.

“In addition, Defendants knew of Melisanidis’s sordid background, including his extensive criminal history for fraud related conduct, his suspect business practices, and his propensity for physical violence.

“But as beneficiaries of Melisanidis’s corporate largesse at Aegean’s expense, Defendants were motivated to utterly disregard their fiduciary duties in order to remain in Melisanidis’s good graces and continue their symbiotic relationship with him.”

The complaint further explained a new group of investors who were appointed independent board members at Aegean later found Melisanidis and his affiliates misappropriating over $300 million from Aegean after completing a 2018 Audit Committee Investigation.

“The new independent directors did not have more or different authority or investigative powers than Defendants,” said the complaint.

“Had Defendants earlier sought to protect Aegean from Melisanidis as the independent directors later did, they could have prevented Melisanidis’s company-destroying wrongdoing.

“These revelations ultimately led Aegean to file bankruptcy days later on November 6, 2018. Now the Trustee, on behalf of the Aegean Litigation Trust, brings this lawsuit to recover the hundreds of millions of dollars in damages caused by Defendants’ breaches of fiduciary duty.”

The original version of the complaint can be read here.

A timeline organised list of events preceding the current development have been recorded by Manifold Times below:

Published: 23 September, 2019

Winding up

Singapore: Notice of dividend issued for defunct bunkering firm Coastal Oil Singapore

Second and final dividend of Coastal Oil Singapore is scheduled to be released from 19 May; company’s former Chief Finance Officer received a nine-year jail sentence in 2021.

Published

22 hours ago

May 19, 2025

Admin

A notice was published in the Government Gazette on Friday (16 May), regarding the second and final dividend to creditors of defunct bunkering firm Coastal Oil Singapore Pte Ltd.

The following are details of the notice of dividend of the company:

Name of Company : Coastal Oil Singapore Pte. Ltd. (In Creditors’ Voluntary Liquidation) (Co. Reg. No 200413975N)
Address of Registered Office : 1 Raffles Quay, #27-10 South Tower, Singapore 048583
Amount per centum : 0.3552 per centum of all admitted ordinary claims
First and final or otherwise : Second and Final Dividend
When payable : On or after 19 May 2025
Method of payment : Remittance or telegraphic transfer
Where payable : c/o FTI Consulting (Singapore) Pte Ltd, 1 Raffles Quay, #27-10 South Tower, Singapore 048583

In 2021, the former Chief Finance Officer of Coastal Oil Singapore received a nine-year jail sentence at the State Courts of Singapore.

Ong Ah Huat earlier pleaded guilty to 15 charges; the charges include three counts of engaging in a scheme to defraud and nine counts of forgery for conspiring with accomplices to defraud eight banks into approving USD 320 million in loans.

The banks involved were: China Merchants Bank (Singapore), Bank of Communications (Hong Kong), BNP Paribas (Hong Kong), Cooperative Rabobank (Hong Kong), DBS Bank (Hong Kong), HSBC (Hong Kong), OCBC (Hong Kong), and Standard Chartered Bank (Hong Kong).

In 2019, Manifold Times reported Hong Kong-listed COSCO SHIPPING International (Hong Kong) Co., Ltd stating its indirect wholly-owned bunkering subsidiary Sinfeng suspecting fraud to be involved in the liquidation of Coastal Oil Singapore during December 2018.

It was believed Coastal Oil Singapore owed approximately US $357 million to 79 firms. Out of the total USD 357 million, banks were the hardest hit taking up about US $354 million, or 99.1%, of total credit owed.

A complete coverage of the events leading to the current development has been arranged by Singapore bunker publication Manifold Times (in descending date order) below:

Photo credit: Manifold Times
Published: 19 May, 2025

Vessel Arrest

Malaysia: MMEA detains Liberia-registered boxship for illegal anchoring off Sekinchan

Container ship was anchored without permission at 22.5 nautical miles southwest of Sekinchan on 16 May; Russian captain and Second Engineer were taken to headquarters for further investigation.

Published

22 hours ago

May 19, 2025

Admin

Malaysia: MMEA detains Liberia-registered boxship for illegal anchoring off Sekinchan

The Selangor Malaysian Maritime Enforcement Agency (MMEA) on Sunday (18 May) said it detained a Liberia-registered container ship for anchoring without permission at 22.5 nautical miles southwest of Sekinchan at about 1.20pm on 16 May.

Selangor Maritime director Maritime Captain Maritime Abdul Muhaimin Muhammad Salleh said the Klang Area Control Centre’s Maritime Surveillance System detected the position of the suspicious vessel at about 9.20am.

He said checks with the Central Region Maritime Department found that the container ship did not apply for permission to anchor.

Preliminary inspection found that the ship was registered in Liberia and is operated by a 44-year-old Russian captain along with 23 crew from various nationalities aged between 32 to 50 years. All of them had complete identification documents.

Further investigation found that the captain of the ship failed to present any documents showing permission to anchor.

Following that, Abdul Muhaimin said a detention order was issued for the vessel while the captain and a Second Engineer were brought to the Selangor Maritime Department headquarters for further investigations.

The case is being investigated under the Merchant Ship Ordinance 1952 for docking without permission from the Malaysian Marine Department director-general.

“If found guilty, they could be imposed a fine of not more than MYR 100,000 or a jail term of two years or both,” he said.

Photo credit: Malaysian Maritime Enforcement Agency
Published: 19 May, 2025

Sanctions

CCIC Singapore amongst nearly 24 firms named in latest US OFAC sanctions

Marine fuel testing and surveying firm CCIC Singapore was accused of concealing the identity of a sanctioned vessel and certifying its Iranian oil cargo as Malaysian heavy crude oil in mid-2024.

Published

6 days ago

May 14, 2025

Admin

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Tuesday (13 May) sanctioned nearly two dozen firms operating in multiple jurisdictions, including marine fuel testing and surveying firm CCIC Singapore Pte Ltd (CCIC Singapore).

OFAC said the Iranian government allocates billions of dollars’ worth of oil annually to its armed forces to supplement their budget allocations, underwriting the development of ballistic missiles and unmanned aerial vehicles, as well as financing regional terrorist groups.

“Iran’s Armed Forces General Staff (AFGS) and its main commercial affiliate, Sepehr Energy Jahan Nama Pars Company (Sepehr Energy), continue to establish front companies and rely on buyers and facilitators to enable their sanctioned oil trade,” it said on its website.

OFAC alleged that Sepehr Energy has “consistently relied” on CCIC Singapore to accomplish not only the necessary pre-delivery cargo inspections required before oil is transferred to China, but also to conceal the oil’s Iranian origins.

In late 2024, CCIC Singapore provided inspection services during a ship-to-ship transfer of approximately two million barrels of Iranian oil from the sanctioned vessel and Sepehr Energy-affiliated SIRI (IMO 9281683), formerly known as the ANTHEA.

In mid-2024, CCIC Singapore also allegedly provided inspection services for the sanctioned vessel HECATE (IMO 9233753) and likely provided falsified documents concealing the vessel’s identity and certifying its Iranian oil cargo as Malaysian heavy crude oil. From late-2023 until at least late-2024, China-based CCIC sister company Huangdao Inspection and Certification Co., Ltd similarly provided oil cargo inspection services to numerous vessels already sanctioned for transporting Iranian oil.

“CCIC Singapore PTE. Ltd. and Huangdao Inspection and Certification Co., Ltd are being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Sepehr Energy,” OFAC said.

Once the oil reaches ports in China, Sepehr Energy and its fronts are reliant on complicit local agencies to handle vessel berthing and discharge operations, as well as transportation and storage services for the vessels’ oil cargoes.

Entities in Shandong province, which is home to many of China’s small, independent teapot refineries—the primary purchasers of Iranian crude oil—have been especially willing to aid sanctioned Iranian vessels and oil cargoes.

OFAC added other companies—typically small agencies with generic or non-descript stated business purposes—have served as the middlemen between Sepehr Energy and Shandong’s teapot refineries by acting as the purchasers of the oil.

In early 2024, Hong Kong-based companies Metaone Trading Limited, South Sea Energy Limited, Continental Sinoil Group Limited, Winso Trading Limited, and Singapore-based Oriental Apple Company Pte Ltd collectively took delivery of millions of barrels of Iranian oil from Sepehr Energy front Xin Rui Ji, likely as representatives of the small, independent teapot refineries based near Qingdao Port area in Shandong province.

Note: The full list of sanctioned companies can be found here.

Photo credit: Manifold Times
Published: 14 May, 2025