Qingdao metals fraud probe focusing on Decheng Mining
September 4, 2014 Category Automotive Metals & Minerals, Metals
China’s investigation of whether metals stockpiled at Qingdao Port fall short of collateral obligations used to secure loans is focused on Decheng Mining, said two bankers assisting with the probe. Decheng’s owner, Chen Jihong, has been detained by public security authorities amid the investigation at Qingdao and a separate probe in Gansu province. Investigators are trying to determine if Decheng used the same batches of copper and aluminum stored at the port as collateral to secure multiple loans. Any findings of wrongdoing at Qingdao risks undermining a broader practice in which traders in China use commodities from iron ore to rubber to get funding. Analysts at Barclays and Goldman Sachs Group have said the probe may weigh down the price of copper. The probe may also affect metals stockpiles at Qingdao held by Citic Resources. The amount of metal involved in the probe was about 20,000 tons of copper, almost 100,000 tons of aluminum ingots and about 200,000 tons of alumina, Reuters said. Several lawsuits related to the matter have been launched.
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