(Bloomberg) — Nidera BV, a division of Chinas largest food company, lost nearly $200 million over three years due to what it called severe irregularities by a single trader in biofuels.
The Dutch grain-trading firm reported in 2015 its first annual loss in five years because of the biofuels business, according to filings in the Netherlands. Ton van der Laan, who until this month was chief executive officer, said last year that Nidera had suffered from the actions of a “rogue trader.”
The losses are a setback for Chinas Cofco Corp., which took control of Nidera two years ago to create a global agricultural commodities trading house.
In the three years to the end of 2015, the company accumulated a net loss of $188 million in biofuel trading. Before taxes, the losses totaled $238 million.
The main reason for the loss were “irregularities discovered in our biofuel trade business in Rotterdam, which led to a considerable overstatement of our stocks and forward book and to a substantial bad debt position,” the company said in its annual filing to the Dutch Chamber of Commerce.
Biofuels Loss
“The responsible trader was dismissed, and we stopped trading in the biofuels business,” Nidera said. “The matter was an isolated event in a non-core part of the business.”
The trading house restated accounts for 2014 and 2015 and changed its financial year. In the 15 months to the end of December, Nidera lost $135 million. That compares with profit of $42.9 million in the 12 months ending Sept. 30, 2014.
We are expecting to be able to achieve growth in the coming years, said Bert Ooms, a spokesman for Nidera.
Cofco bought 51 percent of Nidera in 2014 in a deal that valued the Dutch grain trader at $4 billion, including debt, a person with knowledge of the matter said at the time. The rest of the Rotterdam-based company, established in 1920, is controlled by the founding families.
Cofco will increase holdings in Nidera by the end of the year because the contract governing the 51 percent acquisition includes a clause that ties the stake to the Dutch traders performance, Matt Jansen, CEO of Cofco Agri, said earlier this year. Nidera said in its annual filing that Cofco and the founding families were in ongoing negotiations that could lead to a further increase in Chinese companys stake.
