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Singapore's SembCorp Marine Removes Finance Director

Singapore's SembCorp Marine removed its finance director, alleging he entered into unauthorized foreign-exchange transactions that could lead to an estimated US$248 million in losses.

The marine-engineering company wrote on the Singapore Exchange Web site that Director of Group Finance Wee Sing Guan made the transactions through company unit Jurong Shipyard and "misled" the company on the dealings.

Shares of SembCorp Marine fell as much as 17 percent. SembCorp Industries, which owns about 61 percent of SembCorp Marine, was down as much as 13.5 percent. Both stocks resumed trading at 10 am after imposing a trading halt on Monday.

The alleged transactions could result in an unrealized forex loss of $165 million to SembCorp Marine unit Jurong Shipyard, the company said.

"We believe SembCorp Marine remains strong operationally," Morgan Stanley analyst Praveen K. Choudhary said in a note. "However, the recent revelation of unauthorized foreign exchange transaction could dent investor confidence and result in stock de-rating in our view," he said.

In a separate statement, SembCorp Marine said it had sold part of its shareholding in shipbuilder Cosco for a gain of about S$230 million ($155 million).

Goldman Sachs analyst David Ng said in a client note that the disposal of Cosco shares should partly offset SembCorp Marine's potential forex losses.