A class action has been filed against China Aviation (Singapore) Corporation Ltd., (CAOLF.PK) a trader of petroleum products, including jet fuel, gas oil, fuel oil, crude oil, plastics and oil derivatives, and certain of its officers and directors by stockholders who purchased the company's common stock between February 5, 2004 and November 30, 2004. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

Specifically, the complaint alleges that:

• Contrary to the Company's prospectus, the Company did not have the necessary risk management controls in place for hedging and trading
• Contrary to private placement offering documents, funds raised by the Company were not to fund an acquisition of the controlling shareholders but rather to meet margin calls for the massive derivative losses in the Company
• The Company's financial statements were grossly overstated or the Company was hiding liabilities totaling in excess of $550 million in derivative trading losses and the Company's Chief Executive Officer has been embroiled in legal problems with the Chinese authorities.

As a result of investigations and news reports by Bloomberg and the Wall Street Journal, the Company's stock dropped 29 percent by November 30, 2004.