BP's suit and rebuttals by ex-fuel oil staff

BP Singapore, a unit of BP Plc, filed a lawsuit at the Singapore High Court on July 5 for breach of contract against six former senior staff on its global fuel oil and Asia bunker teams, court documents showed.

In response, the six alleged that the resignations of around 20 staff were due to policy changes and tightening controls on trading that led to their roles being diminished and restricted, while their bonuses were reduced, filings showed.

The defendants, including Quek Chin Thean, Global Head of Fuel Oil Trading, and Clarence Chang, head of the Asia Marine Fuels team, also applied to the court last Thursday to set aside a search order that had allowed BP's lawyers to seize their personal computers, mobile phones and thumb drives.

Following are BP's allegations:

The six are alleged to have breached their fiduciary duties to BP, breached their employment contracts, including their fidelity duties, misused confidential information, coordinated the mass resignations, discussed terms for salary, share schemes and buyout bonuses as well as diverting business away from BP.

"Facts in this case indicate that this was not a sort of situation where employees left but a situation where a mass departure was orchestrated by Quek and assisted by Cheong, whilst they were still in the employ of the plaintiff and whilst they still owed fiduciary duties and duties of fidelity," BP claims in the court filings.

BP's forensic analysis of electronic equipment formed the basis of the evidence for its lawsuit. The following are based on its court submission:

  • Quek and Cheong had been in negotiations with Brightoil since January 2010 to discuss the set up of a competing business against BP, and in touch with Brightoil chief executive and chairman Raymond Sit and chief financial officer Michael Zhang via email exchanges.

  • Quek negotiated the salary and sign-on bonuses of the BP personnel in and out of Singapore with Sit.

  • All six had been involved in a series of email communication using private accounts to discuss the coordination for the mass resignations and the signing up with Brightoil.

  • Sometime before March 2010, Quek initiated a series of emails with Cheong, Sit and Zhang, discussing the setting up of an oil trading firm primarily based in Singapore.

  • Quek had met with Sit and Zhang around March 16 to set a target date for BP employees to join Brightoil and coordinate the departures.

  • In March to June, Quek and Cheong discussed salary terms and buyout bonuses and share scheme for the BP employees who would join Brightoil.

  • On May 10, an email between Quek and Zhang discussed the remittance of $2.695 million by Brightoil as sign-on fees.

  • A total of $950,000 was paid to seven staff from BP's marine fuels division, with each getting $70,000-$150,000, while another $770,000 was paid as annual salaries.

  • A sign-on bonus of $12 million dollars for some of the BP employees that would join Brightoil was also discussed.

The following were raised by the defendants:

  • The six, including Quek, said in their sworn statements that they had all wanted to leave BP after policy changes effective from October, 2008.

  • One issue was the implementation of the "Trading Single Point of Accountability Policy" globally in the company's Integrated Supply & Trading (IST) division, where reporting lines for traders were changed from a single regional head to reporting on a global level by product.

  • In the case of the fuel oil team, which had reported to Quek as Chief Operating Officer (COO) for Eastern Hemisphere in Singapore, it had to report to several managers in more than one geographical location.

  • BP also introduced a bonus retention scheme, where traders are paid 70-75 percent of their entitled bonuses, instead of the full sum, at the end of the financial year, with the balance to be paid over the subsequent two years.

Quek Chin Thean

Quek, who was moved from COO, Eastern Hemisphere, to global fuel oil trading chief, said the new policy caused a rift between the commercial and functional teams, which "did not have the proper competencies to help the traders".

He considered his move a lateral one in that he was only in charge of commercial delivery of the business, with no control over global trading strategies, budget, human resource, legal and compliance policies.

"Although I had little or no ability to dictate trading policies, guidelines, longer term strategies, and further had no authority to... affect overhead costs and supporting functions, the entire division was under constant pressure to raise its bottom line and increase its return," Quek said.

"At that time, I bly felt that BP was treating its staff as commodities rather than individuals."

He added that BP had a compliance team that used "fear tactics" to manage the trading teams and several members of his fuel oil team were subjected to "oppressive and heavy-handed" internal investigations and disciplinary hearings.

John Foo, Trading Manager, fuel oil

Foo said the decision-making process became very tedious after the restructuring, where business decisions could not be made efficiently and had to be passed through multiple layers of bureaucracy.

"My team and I did not feel protected at all. Instead, I felt exposed by BP's refusal to allocate me with sufficient resources to adhere with compliance standards," he said.

"It seems that from 2008, instead of working with us to find meaningful solutions toward meeting compliance requirements, BP's compliance agenda became one more focused on policing and penalizing individuals for any breaches."

Clarence Chang

Chang said both his team's and his roles were substantially reduced after his marine fuels team was brought under the IST division following the policy change.

His team, which had been able to develop its own forward business strategies, was reduced to a client-management role, with limited business development duties and not required to undertake new projects.

"My role was reduced to chasing bills on behalf of BP," he said.

[Source: Reuters, Singapore, 02Aug10]

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