Trafigura’s top oil trader in Mongolia loaned more than $500m of the trader and shipowner’s money to a company owned by his aunt, according to sources and a document cited by Reuters.
The group said in October it was making a provision of $1.1bn after uncovering “serious misconduct” by staff involved in its Mongolian petroleum products supply business.
Reuters has now claimed that Jononbayar Erdenesuren provided the money to Lex Oil, which belonged to a woman named as Erdenetuul, his aunt, according to three sources close to Trafigura and an ownership document.
Reuters’ reporting is also based on those sources, two banking sources, and an undated document from Mongolia’s Department of State Registration showing Lex’s ownership details.
Erdenesuren’s LinkedIn profile shows he has racked up 13 years at Trafigura.
Trafigura has not named anyone involved in the investigation because it is ongoing.
A Trafigura spokesperson told TradeWinds it is not commenting.
The company did not answer Reuters' questions on the matter.
Erdenesuren, his aunt, Lex Oil and a lawyer for the firm have not responded to Reuter’s request for comment.
Erdenetuul sold Lex Oil in 2022 to her husband, Dashnyam Chinbat, according to a screenshot of the ownership document. He did not respond to a Reuters request for comment.
Trafigura’s findings last year were made by an internal review followed by an external “forensic” investigation, the group said.
The misconduct included manipulation of data and documents, resulting in inflated sums being paid by Trafigura, and deliberate concealment of overdue receivables, the commodities giant added.
There was a “complex chain of transactions with a small number of local counterparties”, it admitted.
The external probe remains ongoing but has confirmed a significant exposure for the group, accumulated over about five years.
Chief executive Jeremy Weir said in the group's 2024 annual report the discovery of Mongolian misconduct was "extremely disappointing".
"We have reviewed other higher-risk offices and lines of business, and we are confident that these issues are isolated to a self-contained operation in Mongolia," he added.
"Wrongdoing in Mongolia was uncovered as a result of increased scrutiny in recent years. We are significantly building on and extending this work as a matter of urgency, to review, test and improve our end-to-end control framework, systems, risk and governance structures," Weir said.(Copyright)
