Singapore washes hands over widening CAO scandal

The Singapore stock exchange could not have prevented the derivatives trading scandal of China Aviation Oil (Singapore) Corp (CAO), the chief executive of the city-state's bourse said in Beijing yesterday.

The crisis, the freshest reminder to international investors of insufficient internal controls and corporate governance at Chinese companies, has moreover not altered the 12-year-old policy of the Singapore Exchange to attract more mainland listing candidates.

'No standards, no rules, no process which we've developed over the years, no matter how carefully, can prevent a mishap or a clear case of misconduct in the case of CAO,' Singapore Exchange chief executive Hsieh Fu Hua said on the sidelines of the Inaugural Global Young Chinese Business Leaders Forum in Beijing.

'But I'm here to say one simple thing,' he said.

'That is, the direction of the Singapore Exchange remains unchanged. The Singapore Exchange will continue to be open to listings coming from China.'

Added Lee Yi Shyan, chief executive of International Enterprise Singapore, a government agency that helps Singaporean companies expand internationally: 'Our present financial regulation is built upon the concept of 'buyer be aware'. Buyers must be cautious and the government will not say whether investors should buy or not buy a certain stock.'

CAO held a monopoly to import and supply jet fuel to China's state-controlled airlines.