Nasdaq OMX: OW Bunker Scandal is "Poison to the Stock Market"

OW Bunker was listed on the on the Nasdaq OMX Copenhagen in March

This week's surprise news of an estimated $275 million loss at Denmark-based OW Bunker is "poison to the stock market", Carsten Borring, head of listings and capital markets at Nasdaq OMX in Copenhagen, has told Bloomberg in a phone interview.

"This is one of the big surprises," said Borring. "This really isn't good."

"There's no doubt this case is damaging to investors and the stock market.

"The stock market depends deeply on the relationship of trust between investors and companies."

In March, shares of OW Bunker opened at 17.9 percent above the company's initial public offering (IPO) price on Nasdaq OMX Copenhagen, valuing the company at around $900 million.

Eight months later, the firm says "it must be assumed that the group's equity is lost."

In that time, the company twice cut its full-year forecast for 2014 before announcing a "disappointing" Q3 loss of $5.8 million, which included what it said was a $24.5 million unrealised risk management loss.

On Wednesday, NASDAQ OMX Copenhagen announced that trade in shares of OW Bunker had been suspended, and the company subsequently announced that following a review, the previously announced $24.5 million risk management loss was actually around $150 million, and in addition a $125 million fraud had been discovered at its Singapore-based subsidiary Dynamic Oil Trading (DOT).

"No one can foresee fraudulent activity by individuals," said Stephan Ghisler-Solvang, a spokesman for Nordea Bank AB which was involved in OW Bunker's IPO.

"No one could foresee that the company would incur losses of this magnitude after the IPO."

OW Bunker Risk Management and EVP Jane Dahl Christensen was dismissed Wednesday over the risk management loss, while police in Denmark are said to be investigating the fraud.

"The advisers and the people around the company may have some issues to answer," Borring said, adding that it would be irresponsible to resume trading of the company's shares.

"We'll have to wait for the next statement from the company."

OW Bunker has been given until December 1, 2014 to present a restructuring plan.