China Aviation Oil (Singapore) Limited - Sliding Down a Slippery Slope: The US$550m Derivative Trading Loss of November 2004

Published 09 Jan 2005
Reference 5292
Industry Oil & Energy
Region Asia
Summary

A description of the events leading to the collapse of China Aviation Oil under US$550m of derivative trading losses and subsequent attempts to identify the causes and save the company from liquidation via a debt restructuring scheme of arrangement.

Teaching objectives

Identify corporate governance and risk management measures necessary for smooth running of a company, as well as the dangers of derivative trades in the hands of those either ignorant or reckless of the risks.

Keywords
  • Corporate governance
  • Risk management
  • Derivative trading
  • Debt restructuring
  • Corporate Governance
  • Investors, Stakeholders and Accountability