mistake.club2nd Opinion
Back to the archive

The encyclopedia · Finance & Accounting · Financial decision · 2014

OW Bunker was the world's largest oil trader — and $1B of its revenue was fake

OW Bunker, Denmark's largest company by revenue, found $1B in fraudulent trades in November 2014. It filed for bankruptcy in 7 days.

OW Bunker · Danske Bank · 2014-11

What happened

OW Bunker, founded in 1980, was the world's largest marine fuel trader and Denmark's largest company by revenue ($17 billion in 2013). It supplied bunker fuel to ships in 800+ ports worldwide. The company had IPO'd on the Copenhagen Stock Exchange in March 2014 at a $1.8 billion valuation.

In November 2014, OW Bunker disclosed that its Singapore subsidiary had $1 billion in fraudulent trades — unauthorized positions taken by a trader who had been falsifying records. Simultaneously, the company revealed $275 million in unauthorized hedging losses at its UK subsidiary. The total exposure exceeded $1 billion.

OW Bunker filed for bankruptcy on 7 November 2014 — seven days after the disclosure. The stock went from $30 to zero. Danske Bank, OW Bunker's main lender, faced a $500 million write-off. The collapse was Denmark's largest corporate bankruptcy and one of the fastest: a $1.8 billion public company went from IPO to bankruptcy in eight months.

Why it happened

  • The Singapore subsidiary's $1B in fraudulent trades went undetected because internal controls were weak — a single trader could take unauthorized positions without oversight.
  • The UK subsidiary's $275M in unauthorized hedging losses was a second, independent failure — two subsidiaries, two different frauds, suggesting a systemic control problem.
  • The IPO in March 2014 created pressure to show growth, which may have encouraged risk-taking and discouraged internal scrutiny.
  • The seven-day collapse from disclosure to bankruptcy shows how quickly a commodity trading company can fail when its credit lines are pulled.
What it cost$1B fraud; $1.8B valuation to zerocatastrophic

The lesson

A trading company is only as trustworthy as its controls. OW Bunker traded $17B a year, but one trader took $1B in unauthorized positions. Revenue is not a moat; controls are.

Aftermath

OW Bunker was liquidated in 2014. Criminal charges were filed against several former executives. Danske Bank wrote off $500M. The case led to reforms in Danish corporate governance and commodity trading oversight. OW Bunker is cited alongside Enron as an example of how trading companies can hide losses until the day they cannot.

Sources

spotted an error? The club wants to know.

Comments · 0

    Sign in to join the comments.

    More like this

    2009 · Finance & Accounting

    Allen Stanford's $7B Ponzi scheme — 110 years, 28,000 victims

    $7B lost, 110-year sentence, 28,000 victims in 131 countries
    2025–2026 · Finance & Accounting

    DSJ Exchange collapsed as a $150M Ponzi that laundered $92M across blockchains

    $150M+ Ponzi; $92M laundered; $41.5M frozen
    2023–2026 · Finance & Accounting

    A ¥6.3B rescue couldn't stop a ¥23.7B writedown at China's mall giant

    ¥23.7B loss; ¥23.4B from fair-value writedowns

    Somewhere, someone solved the problem this company failed at. 2nd Opinion →