(Reuters) – Global commodity trader Trafigura expects to set aside a $1.1 billion provision against misconduct by individuals in its Mongolian petroleum products supply business after an internal review, it said on Wednesday.
“The misconduct included manipulation of data and documents, resulting in inflated sums being paid by Trafigura, and deliberate concealment of overdue receivables,” its statement said.
An external investigation which followed the internal review is still ongoing but has confirmed a significant exposure for the group, accumulated over approximately five years, Trafigura said.
“We are bitterly disappointed by the misconduct in our Mongolian oil business,” Trafigura Executive Chair and CEO Jeremy Weir said.
“There is no place in Trafigura for wrongdoing and we are taking appropriate disciplinary action against the small number of individuals involved,” he added.
A substantial proportion of the total exposure has been acknowledged as a debt owed to Trafigura by its principal counterparty in Mongolia, it said in the statement.
“We intend to hold the counterparty to their repayment obligation,” it added.
Trafigura also flagged that it would likely be required to restate prior year comparative figures in its 2024 financial statements. Trafigura is expected to report its full-year results in December.
(Reporting by Brijesh Patel in Bengaluru; Editing by David Goodman and Emelia Sithole-Matarise)
