BNPP relied on Singapore Financial Reporting Standard 39 as the basis of its rebuttal to Mr Riehl’s expert opinion.
BNPP said concealment or deferment would be impossible “with fair valuation of ALL derivative financial instruments through the profit-and-loss account as required by by FRS39”.
BNPP said this is further evidenced by assurances made by Board of Directors in 2006’s audited financial statements on Mr Wee’s forex transactions.
BNPP said it was not able to fully appraise its client’s forex positions as it was dealing with 11 other banks.
On a hindsight, similar to APB’s case, a bank with significant dealings with a company, should seek periodic face-to-face report and review with a panel of at least 2 or more its senior management staff.
Referring to the court proceeding between BNP Paribas (BNPP) and SembMarine as reported by Conrad Raj in BT, January 3, 2008.
Heinz Riehl, SembMarine’s “expert” witness, is trying to offer a defence for SembMarine, with the following:-
- non-financial institutions do not mark to market the value of the forward positions and;
- only recognise cash (ie. realised) profits and losses.
This is a very poor excuse offered on behalf of a corporate of the size of SembMarine. He is saying that SembMarine do not have anyone to monitor whether the respective forex positions were making money or otherwise. They would just receive any profit and pay out any losses upon closure of any position.
As I have said before in my last posting on this topic, SembMarine could always ask the bank for a daily mark-to-market report assuming if SembMarine may not have the expertise in house.
Mr Riehl, are you saying that once a pregnancy is conceived, there is no need for any medical review at various stages of pregnancy but are only concerned with the outcome at the day of birth?