Citic Resources sues Qingdao Port
September 30, 2014 Category Logistics, Warehousing
Citic Resources has filed a lawsuit against Qingdao Port International, demanding USD108 million in compensation if its fails to deliver base metals retained by the authorities as part of a fraud investigation. Citic Resources claims it suffered a severe loss from its inability to dispose of 223,270 tons of sandy metallurgical grade aluminum and 5,004 tons of electrolytic copper as a result of Qingdao Port’s refusal to deliver the metals. Meanwhile, HSBC and ABN Amro Bank sued Chen Jihong, the Singapore national said to be at the center of a probe over whether metals were pledged multiple times as collateral for loans. He has been detained in China. HSBC has asked Singapore’s High Court to liquidate Chen’s Zhong Jun Resources after it failed to repay USD4.3 million. ABN Amro won an order for Chen to pay USD22 million owed under a loan agreement with Zhong Jun and another of his companies. Yu Shengping of Qingdao Port International’s Legal Department, told the South China Morning Post that all parties would have to wait for the result of the criminal investigation before there could be any meaningful progress in civil actions. “This incident has brought damage to the reputation of Qingdao Port. We are also victims,” said Yu. The court held its first hearing earlier this month. Commodity financing has come to the fore because millions of dollars were lent by banks to groups or firms using metals or agricultural goods as collateral. Lenders are deeply worried that in some cases, the same commodity was used for loans multiple times.
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