Factbox: Potential losses in suspected China port metals financing fraud tops $930 mln

GKE

16/08/2014 05:34

Aug 16 (Reuters) - Global warehousing firm Pacorini became 
the latest firm to take legal action in connection with the 
suspected metals financing fraud at China's Qingdao Port, 
signalling losses could amount to more than $930 million at the 
world's seventh busiest port. 
    Chinese authorities in May launched an investigation into 
whether a private metals trading firm, Decheng Mining, and its 
related companies used fake warehouse receipts at Qingdao Port 
to obtain multiple loans secured against a single cargo of 
metal.  ID:nL4N0OS1XO  
    The exposure of foreign banks and various trading firms, 
including CITIC Resources Holdings Ltd  1205.HK  and Mercuria 
Energy Trading SA, could amount to more than $930 million, 
according to an aggregation of amounts in company statements, 
reports and court documents. 
    Local media also said Decheng and its parent owed Chinese 
banks at least 16 billion yuan ($2.58 billion). Decheng has not 
commented on the probe.  ID:nL4N0PL2VU  
     
    - Pacorini Logistics has launched two legal proceedings 
against Qingdao Port International  6198.HK  and its related 
companies claiming a total of $58.4 million for damages related 
to metal stored at the port. Pacorini said the port and relevant 
parties failed to deliver 8,085.189 tonnes of aluminium ingots 
and 112,731 tonnes of alumina, according to exchange statements. 
    - ABN Amro Bank has sued Citic Australia Commodity Trading 
for making a wrongful claim for a metal cargo which the bank 
said it already owns the pledge right. The bank has asked the 
court to order Citic Australia to withdraw claims to the metal 
and to compensate the bank one million yuan ($162,680) for 
losses, according to exchange statements by Qingdao Port. 
    - HSBC has commenced wind-up proceedings against Zhong Jun 
Resources (S) Pte, the overseas arm of Decheng, after the firm 
defaulted on payments. Zhong Jun Resources owes the lender $4.3 
million, according to court documents. 
    - Dutch state-owned bank ABN Amro  ABRGPA.UL  won an order 
in the Singapore Court last week for Chen Jihong, chairman of 
Decheng's parent company, to pay it $22 million owed under a 
loan agreement with Zhong Jun and another of his companies. 
    - Citigroup  C.N  said last month it has about $280 million 
in loans tied to commodities in two ports at the centre of the 
scandal. That is a big portion of its roughly $400 million worth 
of commodity financing deals in China.  ID:nL2N0PT24L  
    - Hong Kong-listed Citic Resources  1205.HK  has begun court 
proceedings against subsidiaries of Qingdao Port  6198.HK  and 
is claiming losses of $108.1 million, according to exchange 
statements. 
    - Britain's Standard Chartered  STAN.L  said it had started 
legal action to claim about $36 million as part of a $40 million 
loan facility for Zhong Jun Resources, the Singapore arm of 
Decheng, a spokeswoman told Reuters.  ID:nL4N0PP2KE  
    - Standard Bank Group  SBKJ.J  said last month it has a 
total exposure related to the Qingdao port of about $170 million 
worth of aluminium and has started legal proceedings in Shandong 
province. It also has an exposure of $40 million worth of 
aluminium at other bonded warehouse facilities in Shandong 
province and has started legal proceedings to secure its 
position.  ID:nL4N0PL2VU  
    - Mercuria had alumina worth about $44 million stuck at 
Qingdao port, according to four banking sources with direct 
knowledge of the situation.  ID:nL4N0PK1F0  
    - Shanxi Coal International Energy Group  600546.SS  said it 
was suing Decheng and its parent for more than $177 million in 
missed payments the two had guaranteed.  ID:nL4N0P81DX  
    - Singapore-listed warehouse company GKE Corporation Ltd 
 GKEC.SI , a unit of trading house Louis Dreyfus, said in June 
that an investigation into the port fraud may affect the 
business of GKE (Shanghai) metal logistics. It has not stated 
the value of any potential exposure. 
 
 (Reporting by Fayen Wong in Shanghai and Melanie Burton in 
SYDNEY; Editing by Alex Richardson) 
 ((melanie.burton@thomsonreuters.com)(+612 9373 1803)(Reuters 
Messaging: melanie.burton.thomsonreuters.com@reuters.net)) 
 
Keywords: CHINA QINGDAO/LOSSES