Police in Singapore arrested Chen Jiulin, the chief executive of China Aviation Oil (Singapore) Corp., and Jia Changbin, the president of its Chinese government-owned parent company, in connection with a derivatives-trading scandal in which CAO Singapore incurred losses of about $500 million.

Wednesday's arrests came as CAO Singapore's creditors voted to approve a debt-restructuring plan that calls for the Singapore-listed jet-fuel trading company to repay as much as 56.6 cents on every dollar owed.

In addition to Chen and Jia, who is CAO Singapore's nonexecutive chairman, police arrested CAO Singapore's finance director, Peter Lim, and two other executives of the company's Beijing-based parent, China Aviation Oil Holding Co. The two executives are also nonexecutive directors of the Singapore unit. Chen and Lim, who are based in Singapore, were in custody.

The five were charged Thursday morning in a Singapore court. Chen faced 15 charges, including forgery, making false financial statements and failing to disclose the losses to the board. Lim was charged with five offenses, including issuing false financial statements. Two holding company executives were charged with failing to disclose losses to the board and to the Singapore Stock Exchange.

Jia was charged with insider trading in relation to China Aviation Oil Holding selling a 15 percent stake in CAO Singapore on Oct. 20. The proceeds of the sale were used help CAO Singapore meet margin calls, but the holding company didn't disclose CAO Singapore's huge trading losses to the Singapore stock exchange or to investors at the time.

Lawyers for Jia, Lim and the two holding company executives planned to post bail today, but Chen, whose bail was set at $1.2 million, remains in custody.

Singapore's move reflects how seriously the city-state takes protecting its reputation as a global financial center. In particular, Singapore's decision to arrest Beijing-based executives of a China state-owned enterprise in connection with the trading scandal is likely unprecedented, according to lawyers and bankers in Beijing.

Chinese authorities have punished executives of its stated-owned companies for crimes such as fraud. In some cases, Beijing has recalled executives from units in places such as Hong Kong to face punishment back home.

But corporate and political analysts in Beijing and Hong Kong cannot recall an instance in which foreign authorities have charged executives of a state-owned Chinese company with white-collar crimes.

"I don't think anyone else has had the [courage] to do it," said Fraser Howie, a Hong Kong-based specialist in Chinese securities and the author of "Privatizing China." "They're all convinced that the Chinese have very long memories and will never speak to them again."

CAO Singapore, which held a monopoly on buying jet fuel on international markets and selling it to Chinese customers, began speculating in options linked to oil prices in March 2003. The company bet wrongly against rising oil prices, and when its trading debts came due in early 2004, CAO Singapore restructured its options portfolio into a more risky type of derivative, racking up more losses.

In November, CAO Singapore told the Singapore Stock Exchange that it had incurred losses of $550 million.

PricewaterhouseCoopers LLP, which was appointed last year to investigate the company at the request of the Singapore Stock Exchange, said in a report issued last week that Chen shouldered the most responsibility for the debacle. But the auditor's report also said CAO Singapore's other executives, traders and directors shared the blame for what it deemed repeated "failure of corporate governance." It concluded that the company lacked proper risk-management guidelines and ignored the guidelines it did have.

According to PricewaterhouseCoopers, CAO Singapore executives concealed mounting derivatives-trading losses from the company's board and its audit committee and failed to report the true financial situation to investors throughout 2004. The audit report also alleged that Chen forged the signature of CAO Singapore's chairman, Jia, on a document in a bid to persuade the company's finance director, Lim, to issue a financial statement in November that failed to mention the company's huge losses.

The audit report also charged that the six Beijing-based nonexecutive directors on CAO Singapore's board -- who also work for its parent company -- failed to tell the rest of the board that Chinese government regulators had ordered the Singapore unit to stop speculating in derivatives in March 2002.

On Oct. 10, Chen formally informed the parent company, China Aviation Oil Holding, about the derivatives-trading losses and asked that they not be disclosed, the PricewaterhouseCoopers report said. CAO Holding subsequently sold the 15 percent stake in CAO Singapore on Oct. 20 and lent the company the proceeds. It was too late. The company told the Singapore Stock Exchange of its losses and applied for court protection from creditors a month later.

In a statement Wednesday, CAO Singapore said Gu Yanfei, who is head of enterprise planning at the parent company and who was sent to Singapore last year to head up CAO Singapore's restructuring task force; Li Yongji, head of assets and financial management at the parent company; and Jia have been notified that they "may be charged" with failing to disclose the losses to CAO Singapore's board, an offense under Singapore's Companies Act, and to the stock exchange, which is an offense under Singapore's Securities and Futures Act.

A spokesman in Beijing for CAO Holding said the PricewaterhouseCoopers report gave an "objective conclusion on who should take responsibility" for CAO Singapore's collapse. The parent company has hired an international law firm and an accounting concern to "help us prepare for any possible lawsuits," he said.

China's State-Owned Assets Supervision and Administration Commission, which stated last month that it would investigate the CAO Singapore affair, declined to comment on the arrests in Singapore.

The arrests of CAO Singapore's executives and the company's creditors' approval of the debt-restructuring plan could open the way for Temasek Holdings Pte. Ltd., the investment arm of the Singapore government, to take on the role of CAO Singapore's savior.

Qiu Haixu in Beijing contributed to this report.

Chen Jiulin, left, the chief executive of China Aviation Oil (Singapore) Corp., faces 15 charges, including forgery, making false financial statements and failing to disclose losses to the board.