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Magnets on Meters: Director of Urban Energy to serve 34 months’ imprisonment over bunkering offences

Director handed industrial strength magnets to cargo officers of Southernpec 6 and Southernpec 7 and provided instructions on where to place the magnet on the MFM, according to court documents.

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A Judge at the State Courts of the Republic of Singapore on Friday (25 June) issued the Director of Urban Energy Pte Ltd a 34-month imprisonment term due to his role in a conspiracy to tamper with the mass flowmetering (MFM) systems on board Singapore bunker tankers Southernpec 6 and Southernpec 7.

Dylan Kek Kah Hui incorporated Urban Energy in July 2018; the company is in the business of running bunkering operations on board bunker tankers.

Kek was formerly employed by Eric Ang Heng Lye of Seahub Energy; Ang on 9 June was issued a 35-month imprisonment term over his involvement in the similar case.

Kek pleaded guilty to 14 charges under s 7(1)(b) read with s 10(1) of the Computer Misuse Act (Cap 50A, Rev. Ed. 2007) (CMA); and (b) 1 charge under s 204A read with s. 109 of the Penal Code (Cap 224, 2008 Rev. Ed.).

Discovery of offences

Court documents obtained by Singapore bunkering publication Manifold Times showed a Maritime and Port Authority (MPA) Port Inspector boarding the Southernpec 7 during a routine patrol on 19 April 2019.

The Port Inspector found a magnet attached to the bunker tanker’s MFM while it was refuelling Sakizaya Ace and subsequently alerted the Police Coast Guard; the authorities later decided to also investigate Southernpec 6 due to it being a sistership of Southernpec 7.

A request by the authorities to have the MFM vendor review data from the bunker metering computer (BMC) on both vessels found at least 66 separate bunkering operations during which the MFM was tampered with.

Summary of conspiracy

In June 2018, Success Energy started running bunkering operations for New Ocean Fuel Pte Ltd which chartered Southernpec 6 and Southernpec 7 for the delivery of marine fuel; Kek was an employee of Success Energy.

Around July 2018, Kek incorporated Urban Energy to take over bunkering operations of the Southernpec bunker tankers for New Ocean.

Kek handed industrial strength magnets to cargo officers of Southernpec 6 and Southernpec 7 and provided them instructions on where to place the magnet on the MFM.

He also advised cargo officers to use tape that had the same colour as the surface of the MFM in order to disguise the use of the magnet on the MFM.

Additionally, Kek taught cargo officers to apply the magnet only after the bunkering process had begun, and to limit the duration of use of the magnet to prevent the discrepancy between the MFM readings and the amount of marine fuel delivered from being too obvious to the buyer vessel.

The purpose of using a magnet to tamper with the MFM is to cause a higher amount of bunker fuel to be recorded on the BMC as having been delivered to the buyer vessel than what was actually delivered; it therefore helped New Ocean to “save” on the bunkers delivered.

Cargo officers of Southernpec 6 and Southernpec 7 would send Kek a text message informing him of the amount of fuel saved through the use of the magnet on the MFM after each bunker delivery.

Investigations reveal that on Kek’s instructions, between October 2018 and April 2019, the cargo officers and an accomplice placed the magnet on the MFM of the Southernpec 6 and the Southernpec 7 on a total of at least 66 separate bunkering operations.

Kek collected at least $40,000 per month from New Ocean for bunker fuel saved through the use of the magnet, in addition to his monthly salary of SGD 25,000 from New Ocean.

After reimbursing part of his commission to Ang of Seahub Energy, Kek, Ang and another accomplice will divide the reminding commission between themselves after deducting commissions to cargo officers.

On average, Kek will pay cargo officers $50 for every metric tonne (mt) of bunkers saved. The cargo officers received at least $4,000 per month with some up to $11,000 per month, in addition to their base salary of $2,500.

“The estimated total value of MFO which was erroneously recorded as having been delivered to the receiving vessels across the 14 proceeded CMA charges is US$121,585.60,” stated the document.

“The estimated total value of the MFO across all 66 CMA charges (including those which have been taken into consideration) is US$336,930.63.”

A summary of the 14 CMA charges is as follows:

CMA Charge Undelivered Fuel to Vessel Value of Undelivered Fuel
01 16.7 mt to Sakizaya Ace USD 7,114.20
02 27.1 mt to Teton USD 11,327.80
03 22.6 mt to Dawn USD 8,859.20
04 13.5 mt to Antarctic USD 4,671.00
05 21.7 mt to Tasos USD 8,202.60
06 21.6 mt to Cronus Leader USD 8,078.40
07 35.5 mt to Angelic Glory USD 15,052.00
08 21.0 mt to Snowy USD 8,386.90
09 21,6 mt to PVT Sapphire USD 8,510.40
10 22.0 mt to Ocean Marvel USD 8,613.00
11 34.7 mt to Ocean Paradise USD 13,533.00
12 10.6 mt to Fortune Glory USD 3,678.20
13 19.8 mt to STI Manhattan USD 8,385.30
14 16.8 mt to Dato Fortune USD 7,173.60

 

The above article is the latest in the series of ‘Magnets on MFMs’ articles written by Manifold Times; earlier stories related to the development are as follows:

Related: Magnets on MFMs: Trial ends with 35-month imprisonment sentence for Director of Seahub Energy
Related: Magnets on MFMs: Trial ends with ten-month imprisonment for Bunker Clerk of “Fragrance”
Related: Magnets on MFMs: Driver posed as Southernpec bunker crew to commit MFM tampering
Related: Magnets on MFMs: Trial starts for former bunker clerk of “Consort Justice”
Related: Magnets on MFMs: First suspect charged over MFM tampering in landmark case
Related: Magnets on MFMs: “Consort Justice” crew pleads ‘not guilty’ to tampering charge
Related: Singapore: Southernpec bunker supplier licence revoked by MPA
Related: Official: MPA revokes Southernpec bunker craft operator licence
Related: Magnets on MFMs: MPA suspends Southernpec bunker craft license
Related: Magnets on MFMs: Case of ‘a few bad apples spoiling the basket’
Related: Magnets on MFMs: Issue a breach of ‘Operational Security’ under TR 48 (updated)
Related: Singapore: Sea Hub Energy exits MPA bunker craft operator list

 

Photo credit: Manifold Times
Published: 28 June, 2021

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Legal

Helmsman on Inter-Pacific Petroleum legal battle: When ignorance meets fraud

Lester Ho, Associate Director of law firm Helmsman shared his timely key takeaways on the recent case of Goh Jin Hian against defunct Singapore bunker supplier Inter-Pacific Petroleum.

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Lester Ho Helmsman

Lester Ho, Associate Director of multi-disciplinary law firm Helmsman LLC shared his timely key takeaways on the recent case of Goh Jin Hian v Inter-Pacific Petroleum when the Appellate Division of the High Court in Singapore overturned the High Court’s finding that Mr Goh’s breach had caused IPP to incur the losses:

The collapse of a company often prompts a search for blame, especially where the downfall stems from deliberate misconduct such as fraud that appears avoidable in hindsight. Unsurprisingly, a company’s directors are frequently perceived as the root of the problem and become prime suspects in the inevitable witch hunt for accountability. The recent case of Goh Jin Hian v Inter-Pacific Petroleum Pte Ltd (in liquidation) [2025] SGHC(A) 7 is a timely reminder of a director’s duties as well as the legal risks in the event of breach.

The downfall of Inter-Pacific Petroleum Pte Ltd (“IPP”) is well-documented. The Maritime Port Authority of Singapore suspended IPP’s bunker craft operator licence after discovering that the mass flow meter of a bunker tanker chartered by IPP had been tampered with. Concerns raised by IPP’s banks in relation to its business led its non-executive director, Mr Goh Jin Hian, to discover that it was heavily indebted to the banks. It was also discovered that the facilities had been used on sham sale and purchase transactions.

IPP was subsequently placed in compulsory liquidation, and Mr Goh was sued for breach of his director’s duties. It was alleged that the sham transactions could have been prevented had Mr Goh discharged his duties and that he was therefore responsible for IPP’s losses. At first instance, the High Court found that Mr Goh had breached his duty of care and ordered him to compensate IPP for approximately US$146 million in losses (Inter-Pacific Petroleum Pte Ltd (in liquidation) v Goh Jin Hian [2024] SGHC 178). Among other things, the High Court found that Mr Goh was in breach because he was entirely ignorant of IPP’s cargo trading business.

The Appellate Division of the High Court upheld the finding that Mr Goh had breached his duty for having been unaware of IPP’s cargo trading business. However, it overturned the High Court’s finding that Mr Goh’s breach had caused IPP to incur the losses. The Appellate Division found that IPP failed to prove that Mr Goh would have uncovered the sham transactions even if he had discharged his duty. Accordingly, Mr Goh was absolved of his liability to compensate IPP.

There are two broad takeaways from the decision.

The first takeaway is that every director, both executive and non-executive, is held to a minimum standard of care. This standard requires directors to take reasonable steps to put themselves in a position where they can guide and monitor the management of the company. Put simply, ignorance of a company’s business is no defence, even for non-executive directors that are not involved in everyday operations. Accordingly, although Mr Goh was a non-executive director, the fact that he was unaware that IPP was carrying on the business of cargo trading meant that he was in breach of his duties.

It may be surprising that a director could be entirely unaware of an important part of a company’s business. But the reality is that modern day companies have become commercial behemoths with complex and layered operations that makes it all too easy for directors (especially non-executive directors) to delegate oversight over critical business decisions and lose visibility of what their companies do. It is therefore important for directors, regardless of their formal titles, to ensure that there is a robust chain of reporting and command such that they have sufficient knowledge of the company’s operations to discharge their duties.

The second is that, while the law imposes high standards on directors, it does not demand unrealistic standards. As noted, the Appellate Division accepted that Mr Goh had breached his duties for having been unaware of IPP’s cargo trading business. However, it was not persuaded that, even if Mr Goh had discharged his duties and had been properly informed of IPP’s activities, the sham transactions could have been prevented. IPP was affected by what the Appellate Division considered a “deep-seated fraud” that had gone undetected even by IPP’s auditors. In the circumstances, it was far from clear that Mr Goh could have prevented the loss even if he had discharged his duty.

However, just because the law does not expect directors to be superhuman does mean that directors can afford to be complacent. Directors would still do well to take reasonable and diligent steps to ensure that they have a good grasp of the company’s operations and engage competent professionals (e.g., auditors) to help surface risks that they may otherwise miss. In a sense, Mr Goh avoided liability not because his breach was minor, but because the extent of the fraud perpetrated meant that the gravity of his breach cannot be said to have caused the loss. In other words, a less sophisticated or extensive fraud might have yielded a drastically different outcome – directors should take heed.

A timeline organised list of events preceding the current development of Inter-Pacific Petroleum has been recorded by Manifold Times below:

Related: Singapore: Ex-Director of Inter-Pacific Petroleum wins appeal against former company

Related: Singapore: Ex-Director of Inter-Pacific Petroleum appeals High Court decision
Related: Singapore: Former auditors of Inter-Pacific Petroleum undergo private oral examination at court
Related: Singapore: Civil trial between Inter-Pacific Petroleum and Dr Goh Jin Hian begins
Related: Former Singapore Director of Inter-Pacific Petroleum sued for USD 156 million
Related: Inter-Pacific Petroleum creditors authorised to fund lawsuit against former Director
Related: New Silkroutes under investigation over possible breach of Securities and Futures Act
Related: Judicial Managers considering to take former Singapore Director of Inter-Pacific Petroleum to court
Related: Singapore: Inter-Pacific Group receives winding up order from High Court
Related: Singapore: Inter-Pacific Group files for winding up application at High Court
Related: MPA revokes Inter-Pacific Petroleum Pte Ltd bunker supplier licence
Related: Co-heads of Trade and Commodities Finance for Asia-Pacific leave SocGen
Related: Inter-Pacific Group, Inter-Pacific Petroleum to hold creditors’ meet
Related: NewOcean detains Singapore-flagged bunker tanker “Pacific Energy 28”
Related: SocGen lawsuit against NewOcean Petroleum dropped, party to counterclaim
Related: MPA revokes Inter-Pacific Petroleum bunker craft operator licence
Related: Magnets on MFMs: Trial starts for former bunker clerk of “Consort Justice
Related: First suspect charged over MFM tampering in landmark case
Related: With nearly $180 million of debt, IPP proposes interim judicial management
Related: Inter-Pacific Group, Inter-Pacific Petroleum under judicial management
Related: Magnets on MFMs: “Consort Justice” crew pleads ‘not guilty’ to tampering charge
Related: IPP responds to temporary suspension of bunker craft operator licence
Related: MPA temporarily suspends IPP bunker craft operator licence
Related: Singapore: Bunker Cargo officer, crew face charges over alleged MFM tampering

 

Photo credit: Helmsman
Published: 13 June, 2025

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Alternative Fuels

China’s SDARI receives AiPs for alternative-fuelled ships including ammonia bunker vessel

CSSC’s SDARI obtained Approval in Principle (AiP) certificates from classification societies ABS, RINA and LR for four vessel designs including a 50,000 cubic metre ammonia bunkering vessel.

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China’s SDARI receives AiPs for alternative-fuelled ships including ammonia bunker vessel

China State Shipbuilding Corporation’s (CSSC) Shanghai Merchant Ship Design and Research Institute (SDARI) recently obtained Approval in Principle (AiP) certificates from several classification societies for four vessel designs. 

Among the four is a 50,000 cubic metre (m3) ammonia bunkering vessel, which received AiP certificate from American Bureau of Shipping (ABS). 

It integrates liquid ammonia transportation and bunkering functions and can meet the long-distance transportation needs of liquefied gas goods such as liquefied petroleum gas (LPG) and liquid ammonia. 

The ship is equipped with three IMO Type A independent liquid cargo tanks, and uses zero-carbon ammonia fuel to drive the main engine and generator, meeting the IMO greenhouse gas emission reduction strategy and actively responding to the latest greenhouse gas intensity (GFI) requirements of the 83rd meeting of the IMO Marine Environment Protection Committee (MEPC 83). 

The entire ship is equipped with two independent 1,000 m3 deck liquid ammonia storage tanks, taking into account the ammonia fuel endurance requirements under multi-cargo loading and unloading, significantly improving operational economy and flexibility. 

In response to the needs of bunkering operations, it is specially equipped with a retractable bow thruster, side thruster and adjustable propellers to meet ABS’ DPS-1 notation and adapt to the complex port environment of bunkering operations. 

China’s SDARI receives AiPs for alternative-fuelled ships including ammonia bunker vessel

Meanwhile, a dual-fuel LNG/hydrogen-powered Ultramax bulker design and a 30,000 GT Roll-On/Roll-Off Passenger (ROPAX) ship designed to sail in the Mediterranean Sea received AiP certificates from RINA. 

SDARI also received AiP from Lloyd’s Register (LR) for a 113,000 dwt ammonia dual-fuel liquid cargo ship. The optimised propulsion system, specially configured with an ammonia dual-fuel power system and a wind-assisted propulsion system, is expected to save more than 10% energy, especially at low speeds. 

 

Photo credit: Shanghai Merchant Ship Design and Research Institute
Published: 12 June, 2025

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Alternative Fuels

GCMD-BCG survey: 77% of shipowners, operators view net zero as high strategic priority

Survey also found the use of bio-blended bunker fuels has more than doubled to 46% and methanol use has increased from 3% to 6% but uptake of more nascent technologies such as ammonia remains limited.

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GCMD-BCG survey: 77% of shipowners, operators view net zero as high strategic priority

The Global Centre for Maritime Decarbonisation (GCMD) on Wednesday (11 June) said a survey found 77% of shipowners and operators now consider achieving net zero a high priority in their strategy, up from 73% two years ago.

This was among the findings of the second edition of the Global Maritime Decarbonisation Survey, jointly conducted by GCMD and Boston Consulting Group (BCG) between October 2024 and February 2025.

The survey gathered 114 responses from shipowners and operators across a range of vessel types, fleet sizes, and regions. While the survey was conducted before the International Maritime Organization’s (IMO) MEPC 83 session in April, its findings already reflected sustained commitment across the industry. The outcomes of MEPC 83—introducing new regulatory targets and incentives—are expected to reinforce these ambitions and further accelerate momentum.

Survey results show that 60% of respondents have now set net-zero targets (up from 54%), while the use of bio-blended fuels has more than doubled to 46%, and methanol use has increased from 3% to 6%. However, uptake of more nascent technologies—such as ammonia, wind-assisted propulsion systems, solar panels, super-light ships, and air lubrication—remains limited.

The survey also reflects the industry’s desire for policies and regulations to create a level playing field. Nearly three-quarters of respondents identified either compliance measures or financial incentives as the most important policy objectives. A level playing field will ensure that early adopters are not competitively disadvantaged on cost and stakeholders with limited resources can benefit from financial support to overcome economic barriers.

The survey also gathered insights from key bunkering ports, whose support is critical for maritime decarbonisation. Most surveyed ports have roadmaps and dedicated teams focused on initiatives to facilitate maritime decarbonisation, and all of them, namely Port of Antwerp-Bruges, Port of Long Beach, Port of New York and New Jersey, Port of Rotterdam, and Port of Singapore, offer green incentives. 

A significant concern for ports, however, is the lack of demand certainty from shipping companies for both low-carbon fuels and Onboard Carbon Capture Systems (OCCS). This ‘chicken-and-egg’ dilemma hinders ports to take on the investment decision to develop the requisite infrastructure, though the recently introduced GHG pricing mechanism is expected to strengthen demand signals for low-carbon fuels.

Dr Sanjay C Kuttan, Chief Strategy Officer of GCMD, said, “Positive developments in maritime policy, especially from the IMO, which further tighten limits on GHG emissions, along with the increased ambitions voiced by survey respondents, are encouraging signals. Greater cooperation with the ports and pertinent stakeholders across the various value chains will be required to address challenges across the broader ecosystem. With the right investments and collaborative actions, the maritime industry can chart a course to a future where sustainable decarbonisation and commercial success can co-exist.

Anand Veeraraghavan, Managing Director and Senior Partner of BCG, said, “It is encouraging to see that even in the face of global uncertainties, the maritime industry’s decarbonisation ambitions remain intact and steadfast. The recent MEPC outcomes mark a pivotal step forward, sharpening demand signals with incentives for exceeding compliance goals and penalty mechanisms for shortfalls. Now is the time for the industry—both ships and ports—to build on this momentum.

Note: The second edition of the GCMD–BCG Global Maritime Decarbonisation Survey report can be viewed here

 

Photo credit: Lukas Blazek on Unsplash
Published: 12 June, 2025

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