Trafigura's China Oil Chief Released on Bail

The head of Swiss trading giant Trafigura's Beijing office was released on bail this week after eight months in detention, while a probe into alleged fraudulent oil trading continues, two sources with direct knowledge of the matter said.

Li Bo, a Singaporean national, was detained last June and has not been charged in the matter which relates to an alleged $32 million in losses by a private Chinese trader.

Li was the second Trafigura employee to be detained after Chinese trader Qingdao United Energy filed a complaint to police, alleging it had suffered the losses through trade financing deals with Trafigura.

Senior sources at Trafigura, a leading oil and metals trading house, say the matter is a commercial dispute and should not involve police or state prosecutors.

Li was granted bail after his period in detention hit a legal limit, said one of the two sources, who was briefed by authorities. No charges have been laid against him, the source said.

"Li's on bail but he is not allowed to leave the country and has to stand on call if authorities need him," the source said.

The main face for the Swiss firm's Chinese oil business, Li was detained by police as he was preparing to fly to Singapore.

Trafigura declined to comment.

A spokesperson for the Cangzhou Police Bureau, the north China-based police authority in charge of the probe, could not be reached for comment.

Trafigura's Beijing-based oil marketer Tian Meng was arrested in August 2014, but has also not been charged.

Police last July asked prosecutors to charge Tian with contract fraud and fraudulently obtaining letters of credit.

Trafigura sells crude oil to China from West Africa, South America and more recently, Russia. Its main counterparty is Unipec, the trading arm of China's top refiner Sinopec Corp .

Since last year it has also marketed crude oil to independent refineries, which have been allowed import rights, while maintaining its fuel oil business.

Reporting by Chen Aizhu