Published December 25, 2008

Sembcorp, BNPP settle forex claim

By JAMIE LEE
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SEMBCORP Marine has agreed to settle a US$50.7 million claim with BNP Paribas over a forex trading case involving Sembcorp's subsidiary Jurong Shipyard Pte Ltd (JSPL).

The world's second-largest builder of oil rigs said yesterday that it would book a US$30 million charge in the fourth quarter of 2008 as result of the settlement.

This puts an end to the legal tussle between Sembcorp and the French bank that was unveiled more than a year ago, when JSPL revealed potential losses of up to US$303 million.

The losses stemmed from allegedly unauthorised currency transactions carried out by ex-finance chief Wee Sing Guan.

BNP Paribas, which was one of the 11 banks involved in the forex trading, had agreed with JSPL to close out the forex contracts, which amounted to a loss of US$50.7 million.

Late November last year, JSPL offered to place in escrow enough funds to cover that amount to meet any judgment obtained by BNP Paribas, but only if the bank began legal proceedings to recover the alleged debt. BNP Paribas rejected the escrow offer and served a statutory demand on JSPL.

The latter responded by successfully applying for an injunction to prevent BNP Paribas from applying to wind up the company. An appeal that BNP Paribas filed against that judgment was subsequently rejected last month.