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

28 Jun 2021

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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