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French bank Natixis has accused Sugih Energy, an Indonesian oil trader with operations in Singapore, of conspiring with scandal-hit trading house Hontop over fraudulent crude oil transactions.

Singapore’s oil trading sector has been hit by a wave of fraud allegations, following the high-profile collapses of Agritrade, Hin Leong and ZenRock, causing nervousness among banks involved in the city state’s commodities finance sector.

It has recently emerged that Hontop is also accused of forging documents and creating elaborate fake trades in order to obtain financing from Malaysian bank CIMB.

Natixis’ allegations against Sugih bear many similarities to that case, and were both uncovered after alarms were raised by oil major BP, but relate to separate trades.

According to documents filed in Singapore’s High Court and seen by GTR, Natixis says Sugih requested a letter of credit in November 2019 to support a US$64mn back-to-back oil sale.

The transaction involved Sugih – now known as Aeturnum Energy International – selling 1 million barrels of crude to Hontop. Hontop would then sell the same cargo onto BP at a slightly higher price.

The bank says Hontop presented evidence that the transaction was real, including a bill of lading showing the cargo was onboard Hong Kong-flagged oil tanker New Honor.

At the same time, the invoice presented by Sugih for the sale to Hontop affirmed it had agreed to the transaction, that the cargo had been onboarded to the vessel via a ship-to-ship transfer close to the Brazilian coast, and that the shipment was being delivered to China.

Natixis released the funds – a final bill of US$67.5mn – to Standard Chartered, which was providing banking services to Sugih.

However, when Natixis sought to recover the funds from BP, following the on-sale, the oil major informed the bank it had no record of the transaction ever being agreed.

Natixis responded by seeking further evidence from Sugih about the initial sale to Hontop. It says in the court documents that at that point, Sugih “repeatedly failed to explain or demonstrate to [Natixis] that the cargo was shipped on board the vessel and delivered”.

By March this year, the bank’s suspicions had grown, and it informed Sugih it “had reason to believe that the cargo had not been discharged and/or delivered” at all.

Though Sugih’s solicitors said evidence for the shipment was being “collated”, the trader did not provide further documentation despite several requests from Natixis.

The bank says Sugih “ignored [its] requests for transactional documents between the defendant and its supplier, and correspondence in connection with the sale and/or delivery of the cargo, even though those documents would have been in the defendant’s possession”.

After Natixis expressed concerns over Sugih’s conduct, the trader said it would provide further information on the condition the bank agreed not to use it in any legal proceedings.

The bank says it now believes the actual cargo was much smaller – under half a million barrels – and that Sugih did not have the right to sell to Hontop in the first place.

According to Natixis, Sugih and Hontop “conspired to defraud” the bank in order to obtain financing, adding: “The defendant’s representations were false and fraudulently made.”

Sugih and Hontop could not immediately be reached for comment. BP is not accused of any wrongdoing.