Mitsubishi's Subsidiary Loses $320 Million in Energy Derivatives
A rogue employee, who was fired on Wednesday, in Singapore entered into secret unauthorized trades and then lost money as crude prices fell. Mitsubishi said it closed the positions, which it discovered in August when the employee missed a day of work, and filed a complaint with police in Singapore the following day. The company said the employee used a scheme of hiding the derivatives trades as hedges and manipulating data in the unit’s risk-management system to remain undetected.
“[Mitsubishi Corp.] recognizes the seriousness of this matter and shall be redoubling efforts throughout the entire MC Group to ensure that it does not happen again,” it said.
Oil prices have been volatile this year, with benchmark Brent crude futures showing highs above $75 a barrel in April and dropping to below $60 by August.
Mitsubishi, although generally thought of as an automotive company. is actually plays an outsized role in the country’s economy. Mitsubishi Corp., the core company of a conglomerate, is a bog player in oil and gas developments. It also owns a majority stake in one of Japan’s largest convenience-store chains and a smaller stake in sister car maker Mitsubishi Motors Corp.