Chen, 43, was charged in a Singapore court Thursday with fraud and failure to disclose the losses. Thirteen of the 15 charges carry a maximum sentence of seven years in prison. Chen and four other officials who were charged have yet to enter pleas.

Singapore's biggest derivatives trading scandal in a decade heightened concern about investments in companies controlled by China and prompted the city to review its regulations.

Chen, who earned US$2.8 million in 2003 and won awards for risk management and transparency during his seven-year tenure, was suspended as CEO in November, when the company sought bankruptcy protection.

Singapore authorities ``are trying to make the point that if you are a director of a company, a CEO, CFO, then you are directly responsible and can no longer turn around and say `I did not know what was happening','' said Tom James, managing director of energy and commodity consultancy Global Risk Partners.

``We have no comment to make at this point,'' Bian Hui, a spokesman for CAO's Beijing-based parent, said Thursday by telephone.

Chen appeared in Singapore's Subordinate Court and faces 15 charges, including failure to disclose losses at the company. Bail was set at S$2 million (HK$9.37 million).

``Chen will be in remand for some time,'' said Desmond Ong, a lawyer at DLA Piper Rudnick Gray Cary, which is representing Chen. Chen is unable to raise the bail amount, Ong said. A pretrial conference was set for 9am on June 17.

Peter Lim Tiong Sun, 48, the head of CAO's finance division, faces five charges, including making a false statement, which carries a maximum sentence of seven years in prison.

Three non-executive directors - Jia Changbin, 51, president of the company's Chinese government-owned parent; Gu Yanfei, 39; and Li Yongji, 37, who were arrested earlier this week and released on bail - were charged with failing to disclose information to the company's board and Singapore's stock exchange.

Jia faces an additional charge related to the parent company's sale last year of a 15 percent stake in the Singapore- based unit for S$196 million.

The disclosure last November of CAO's derivatives losses came a month after its parent sold the stake in the unit to institutional investors. Deutsche Bank, which arranged the sale, questioned the Singapore unit about its finances before arranging the sale, and the answers ``gave us confidence to proceed with the placement,'' spokesman Mike West said on December 6.

``We have no further comment, our earlier statements stand,'' West said Thursday by telephone.

China Aviation Oil suspended its shares on November 29, after the stock slumped 32 percent that month, and sought court protection.

Singapore's police, stock exchange and central bank started investigations of the company, which Wednesday won approval from creditors to write off 43.4 percent of its debt.

PricewaterhouseCoopers, which investigated China Aviation Oil's losses on behalf of Singapore's stock exchange, said in a report released June 3 that the company overrode internal risk controls.

China Aviation Oil would have reported a pretax loss of S$379 million for the nine months ended September 2004 instead of a profit of S$49.6 million, had options trades been accounted for correctly, PricewaterhouseCoopers said in the report.

The company was named Singapore's most transparent company by the island's Securities Investors Association in 2002. BLOOMBERG