Regulators Probe Shipping Magnate’s Firms
Norwegian-born shipping magnate John Fredriksen — whose Bermuda-based Frontline Ltd. is the world’s biggest supertanker operator — is being scrutinised by US regulators for possible oil price manipulation.
According to a Reuter news agency report today [May 25], two of his trading firms are accused of making $50 million by squeezing markets in 2008.
“He is a rough businessman,” Gunnar Stavrum, who has written two unauthorized biographies of Mr. Fredriksen, told Reuter. “He has been involved in speculative trading before, among other things in currencies. It’s too early to say if these claims of illegal oil trading will hold up.”
Mr. Fredriksen, 67, made his fortune in the “tanker wars” of the 1980s during the Iran-Iraq conflict, when his vessels risked missile fire to load and then transport crude oil cargoes from the Persian Gulf war zone.
Frontline enjoyed the boom in freight rates over the past few years which saw average earnings on the benchmark Middle East Gulf to Japan route rocket up to $180,000 a day before economic turmoil in 2008.
But average earnings have slumped to as low as under $400 a day this year, prompting Frontline to announce today it may divest assets as the sector struggles with a prolonged downturn and mounting fleet growth.
Earlier this year Frontline announced it was “not satisfied” with its 2010 earnings.
While he took Cypriot citizenship in 2006, Mr. Fredriksen runs his businesses from London. He has established a series of holding companies “indirectly controlled by trusts established for the benefit of his immediate family” according to his corporate website.
Many of his companies are registered in Bermuda, including oil and gas exploration giant Seadrill, which announced a major corporate restructuring plan in February.
