[Exclusive] Korea Zinc's 'White Knight' Trafigura Involved in 1.5 Trillion Embezzlement Case... Will the Visit to Korea Be Canceled?

Concerns Over Financial Deterioration, Trafigura CEO's Visit to Korea May Be Canceled
Trafigura Maintains Long-Term Partnership with Korea Zinc
Korea Zinc Holds 1.49% Stake... Choi Yoon-beom Acts as 'White Knight'

Trafigura, classified as the 'white knight' of Choi Yoon-beom, chairman of Korea Zinc, has been implicated in an embezzlement and fraud case worth 1.5 trillion KRW. This is a major incident that could worsen the company's financial situation. Due to this significant adverse event, there is also speculation that the scheduled visit of Trafigura's CEO to Korea next month may be canceled.

Jeremy Weir Chairman and CEO (left) and Richard Holtham Director and Next CEO
[Photo by Trafigura website]

According to major foreign media on the 31st, Trafigura uncovered a case suspected of embezzlement and fraud by employees in its Mongolian oil business. The estimated loss amounts to 1.1 billion USD (approximately 1.5 trillion KRW). For Trafigura, this is another shocking incident following a 500 million USD loss about two years ago in the 'nickel fraud case.' The nickel fraud case involved a contract with the Indian company TMT Metal to purchase nickel, but the containers arriving at the port contained no nickel at all.

According to Trafigura, some employees at the Mongolian branch manipulated data and documents to inflate payment amounts and concealed unpaid debts for about five years. Foreign media reported, "This incident occurred especially at a time when CEO Jeremy Weir is preparing to resign, putting additional pressure on the company," and added, "Currently, the loss is conservatively estimated at 1.1 billion USD, but if the actual recovery possibility increases, the loss amount may decrease."

CEO Weir stated, "I am confident that this issue is limited to the independent operations in Mongolia, but we are taking additional measures to improve supervision and control across the group."

Trafigura is one of the world's largest commodity trading intermediaries. It has maintained a long-standing cooperative relationship with Korea Zinc, including raw material purchases. It holds a 1.49% stake in Korea Zinc. There is high trust in Chairman Choi's management capabilities, and it is known that CEO Weir and Chairman Choi share a close personal friendship.

According to business circles, CEO Weir planned to visit Korea in mid-November to meet with Chairman Choi and other executives. There was speculation that Trafigura, which holds substantial capital in the management rights dispute, might cooperate more closely with Korea Zinc. However, with this major adverse event hitting Trafigura, CEO Weir's visit to Korea, which should focus on this matter for the time being, may be canceled.