Danish pension funds stand to lose millions of kroner after major Danish stock OW Bunker officially went bankrupt on Friday following the discovery of a fraud in its Singapore subsidiary.
Last week, shipping fuel company OW Bunker said preliminary findings suggested it could lose around $125m (€100m) from the crime.
The company said it was forced to file for bankruptcy after banks failed to provide the financing lifeline necessary for a restructuring.
On Friday, the probate court in Aalborg issued a bankruptcy order for the company.
OW Bunker had said earlier in the week, while considering restructuring, that it had to be assumed that all of the group’s equity was lost.
Most big Danish pension funds are believed to have some exposure to the stock.
Statutory pension fund ATP said it had invested approximately DKK150m (€20.1m) in OW Bunker.
This compares with the pension fund’s total portfolio of listed Danish equities of around DKK17bn at the end of the third quarter.
An ATP spokesman said this, and the fact the pension fund had made a 19% return in the first nine months of the year on Danish equities, meant the effect of the corporate collapse on ATP’s investment result would be “very minor”.
“Naturally, we have a very critical view on the course of events,” he said. “We are currently considering our options.”
PensionDanmark said it had total exposure to OW Bunker of around DKK50m, divided between its Danish equities portfolio and its investment in the fund Altor II.
Claus Stampe, investment director of the labour-market pension fund, said: “Our exposure to OW Bunker should be seen in the light of our total equities holdings of DKK40bn.”
He said it was an extraordinary situation the fund took very seriously and was following closely.
“Now we want to have some clarity about what has happened before we can draw final conclusions,” said Stampe.
Meanwhile, engineers’ pension fund DIP said it stood to lose DKK16m in the wake of the collapse, compared with its overall equities exposure of DKK13.2bn.
The loss will amount to a fall in total assets of 0.05%, it said.
Lawyers and economists’ pension fund JØP – which shares an investment department with DIP – put its exposure to OW Bunker at DKK9m, equating to 0.015% of its total assets.
“Of course we are following developments around OW Bunker very closely to see what steps we can take to minimise our loss,” the pension fund said.
Pensions provider PKA, however, said it had no involvement with OW Bunker.
In other news, Danish pensions provider PFA announced it has appointed a chairman for its fund management arm PFA Invest, and is merging two asset management divisions to form a new company.
Peter Engberg Jensen, who retired in April 2013 as group chief executive of Nykredit, has been appointed as chairman of PFA Invest, which provides investment services to both individuals and businesses.
At the same, it said it was merging PFA Kapitalforvaltning and PFA Portøljeadministration into a new company called PFA Asset Management.
The two current directors of PFA Kapitalforvaltning – Poul Kobberup and Jesper Langmack – will have daily responsibility for investment in PFA Invest, as directors of the new PFA Asset Management.
PFA Asset Management will be responsible for all investment functions for PFA, PFA Kapitalforening and PFA Invest, the pensions provider said.