Ex-Shell employee admits mastermind role in S$128m marine fuel heist from Pulau Bukom refinery

SINGAPORE — A former Shell Eastern Petroleum employee on Tuesday (Feb 8) became the first mastermind to plead guilty to his role in the largest misappropriation of marine gas oil from the firm's biggest regional refinery on Pulau Bukom.

Juandi Pungot, 45, and two colleagues are said to be the key planners of the scheme that began in 2007. It involved the siphoning of more than 300,000 tons of gas oil — a type of fuel used on ships and other vessels — worth at least S$200 million.

They then sold the gas oil to foreign vessels at prices lower than the prevailing estimated market value.

The police began investigating when a Shell representative filed a report in August 2017, saying that the firm had suffered a loss of fuel worth about S$2.98 million in April that year.

Prosecutors said that the offences struck “at the core of a strategic industry” and that the scale of the theft, committed by two syndicates of Shell employees on Pulau Bukom, was “unprecedented”.

Shell operates a refinery on the island, its largest petrochemical production and export centre in the Asia-Pacific region.

Juandi admitted in the High Court to 36 charges stemming from the misappropriation of S$127.7 million worth of marine gas oil.

The charges include corruption, laundering benefits from criminal conduct, and conspiracy to commit criminal breach of trust as a servant.

He reaped at least S$5.6 million from his crimes, spending the majority of it on luxury watches and vehicles, Singapore and foreign properties including a Hougang condominium unit, foreign exchange trading, gambling and investments.

Prosecutors are seeking almost 30 years’ jail for him, while his lawyer Noor Marican is asking for 15 years instead.

Justice Hoo Sheau Peng adjourned sentencing to an undetermined date and allowed him to remain out on S$550,000 bail. She will take into consideration another 49 charges for sentencing purposes.

Two other former Shell employees have been jailed for their roles in the scheme — Muhammad Ashraf Hamzah, 40, and Sadagopan Premnath, 41. The latter has lodged an appeal over his sentence.

HOW THE SCHEME WORKED

Prosecutors told the court on Tuesday that the syndicate got away with their crimes for about a decade through various methods. This included timing their thefts with the legitimate loading of gas oil, deliberately distracting their supervisor and tampering with the orientation of closed-circuit television cameras.

They coordinated their activities through chat groups on mobile phones, even though they were not allowed to use their phones while on duty.

Juandi and his colleague, Abdul Latif Ibrahim, allegedly first came up with the scheme in 2007. They then recruited another “key mastermind”, shore loading officer Muzaffar Ali Khan Muhamad Akram shortly afterwards.

These shore loading officers would usually be the ones in contact with a ship captain for the sale and purchase of misappropriated gas oil.

Juandi also rose to that position, drawing a salary of S$5,000 a month or S$6,000 with overtime.

The syndicate called the instances of misappropriation as an “illegal loading”. Its members started doing it with the Anic 1 bunker ship owned by Sentek Marine & Trading, with Juandi and Latif allegedly tampering with the bunker meter to remain undetected.

Between 2008 and mid-2013, they then expanded to various other bunker ships and recruited other colleagues including Ashraf.

At the time, Juandi received about S$10,000 to S$15,000 for each illegal loading.

In 2013, Juandi, Muzaffar, Ashraf and a fourth employee discovered that Latif was holding on to about half of their criminal profits before splitting the remainder with them. This led to a dispute.

Latif was the primary point of contact with bunker ships willing to take part in the scheme. The operations then took a pause when he left to join another team in Shell.

However, the syndicate resumed its activities in 2014 after finding other willing vessels with Vietnamese and Greek captains, and recruited other employees into the scheme.

Juandi and Muzaffar became the team leaders from mid-2014, prosecutors told the court.

The pair and another shore loading officer, Koh Choon Wei, allegedly directed and led the embezzlement. Among other things, the trio negotiated prices, decided how profits should be distributed within the syndicate and recruited their co-conspirators.

The vessels that bought their misappropriated gas oil were mainly those belonging to a company called Prime Shipping.

Juandi and Muzaffar also purportedly began bribing independent surveyors from Intertek Testing Services and SGS Testing & Control Services Singapore, so the surveyors would turn a blind eye to the siphoning of gas oil.

Court documents showed that Juandi conspired to give about S$270,000 in bribes — some deducted from the sale proceeds of the gas oil — to 13 surveyors between 2014 and 2017.

Juandi resigned from Shell in November 2017 after hearing rumours from a colleague about police investigations into the matter. But even after that, he continued to collect and distribute proceeds from the scheme.

IMPACT ON SHELL

In early 2015, Shell began observing significant unidentified gas oil loss at Pulau Bukom.

A 2015 review did not turn up anything suspicious. Shell then implemented various measures to improve processes but the misappropriation continued.

In early 2017, it engaged a third-party consultant to conduct a review, but the investigation did not yield a conclusive explanation for the high oil losses.

It soon experienced its highest hydrocarbon loss since 2015. Shell then hired a global team of analysts, who detected the suspected misappropriation, and a police report was made.

Shell had since taken various measures to improve its systems and processes at Pulau Bukom, including developing a monitoring software to detect potential thefts.

As of 2020, Shell incurred about S$6 million in costs to manage the consequences of the misappropriation.

For each charge of criminal breach of trust as a servant, Juandi could be jailed for up to 15 years and fined.

Those convicted of giving gratification under the Prevention of Corruption Act can be jailed for up to five years or fined up to S$100,000, or both.