Petro-Diamond Singapore lost $360M on oil derivatives — Mitsubishi's rogue trader

Petro-Diamond Singapore was the Singapore-based oil trading subsidiary of Mitsubishi Corporation, one of Japan's largest trading conglomerates. The company sourced and traded crude oil and petroleum products across Asia, acting as a key link in Mitsubishi's global energy supply chain.

In 2019, the company discovered that a trader named Wang Xingchen (also known as Jack) had made unauthorized oil derivatives trades that resulted in losses of approximately $360 million. The trader had exceeded his authorized limits and concealed the positions from management, similar to earlier rogue trader scandals at Sumitomo, Barings, and Société Générale.

The loss was one of the largest trading losses in Singapore since the Hin Leong scandal. Mitsubishi Corporation was forced to absorb the loss and strengthen its internal controls over the Singapore unit. The case highlighted the challenges of managing risk in commodity trading operations that are geographically distant from headquarters.

The Petro-Diamond Singapore scandal was separate from a later incident in 2024, when the same subsidiary suffered another $90 million loss from unauthorized oil trades. The two incidents, five years apart, suggested that Mitsubishi's risk controls in Singapore remained inadequate despite the 2019 wake-up call.