Nidera Says `Rogue Trader' Caused Significant Loss in Biofuels

Updated on
  • China's Cofco bought 51 percent stake in Dutch trader in 2014
  • Nidera CEO says food trader has now exited biofuels business

Nidera BV, the Dutch grain trader controlled by a Chinese state-owned company, suffered a loss in biofuels because of the actions of what its chief executive officer described as a “rogue trader.”

Nidera CEO Ton van der Laan said the grain-trading house has since exited the biofuels business and closed all the deals linked to the losses.

“There is a significant loss,” he said on Thursday in a phone interview from Singapore, declining to provide a figure. He said Nidera will still post a profit for the company’s fiscal year, ending this month.

The actions of the trader "probably lasted for a prolonged time," and the company only "found out earlier this year," he said.

Nidera notified the Dutch police because the trader "was involved in fraudulent action," he said, declining to elaborate. A spokesman for Nidera said the trader was dismissed at the end of the first quarter.

Cofco Deal

Cofco Corp., China’s largest food company, took control of Nidera last year after buying 51 percent of the company to create a global agricultural commodities trading house. The deal valued Nidera at $4 billion, including debt, a person with knowledge of the matter said at the time. The rest of the Rotterdam-based company, established in 1920, is controlled by the founding families.

Nobody answered calls to Cofco spokesman Yin Jianhao’s office line and cell phone. An e-mail inquiry to Cofco’s press office in Beijing was unanswered.

The biofuel losses emerged after global prices plunged earlier this year, said van der Laan. Biofuels, made from crops including soybeans and corn, are closely linked to the price of crude oil. The Nidera spokesman said the company was still evaluating the size of the losses. The company has biofuel inventories that it’s selling to offset some of the losses.

Nidera reported net income of $116.2 million for fiscal 2014 and $72.7 million in 2013, according to company filings in the Netherlands. The company had sales of $18.3 billion in fiscal 2014, little changed from 2013.

Commodity trading houses have been hit by rogue traders in the past, causing big losses. In one of the most notorious cases, Yasuo Hamanaka, a top copper trader for Sumitomo Corp., hid $2.6 billion in losses trading the metal from his Japanese employer in 1996. In another case, a trader in the soybean market caused losses in 1999 for Andre & Cie SA that ultimately prompted the company, at the time one of the largest grain traders, to collapse in 2001.