Citi Has $280m Tied into China Ports at Center of Metals Probe

Posted by Eric Haun
Friday, July 18, 2014

Citigroup Inc has about $280 million in loans tied to commodities in two Chinese ports which are at the center of a probe into possible fraud, a senior executive said on Friday, becoming the first U.S. bank to disclose its potential exposure.

The total is a large portion of the bank's roughly $400 million worth of so-called repo commodity financing deals in China. Short for repurchasing agreements, repo deals give customers access to short-term credit in exchange for goods.

"At this stage we believe the activities are isolated and just specific to those very specific locations," Chief Financial Officer John Gerspach said in a conference call with analysts.

The loans are to clients that are non-Chinese subsidiaries of large multi-national corporations and the contracts are guaranteed by the parent companies, he said.

Citi is the latest bank to disclose the size of its financing business in Qingdao, China's seventh largest port, and nearby Penglai where authorities have been investigating suspected metals financing fraud since May.

The probe centers on a private metals trading firm, Decheng Mining, and its related companies, which are alleged to have used fake warehouse receipts at the ports to obtain multiple loans secured against a single cargo of metal.

The company has not commented on the probe.

As the fall-out of the scandal that has engulfed the base metals market continues, other foreign banks including Standard Bank Group and trading and investment firms, such as Citic Resources Holdings Ltd, face hundreds of millions of dollars of losses.

This week, Standard Chartered launched legal action to recoup its losses.

(Reporting by Josephine Mason; Editing by Richard Chang)

Maritime Reporter November 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Ports

Fighting for Ports Escalates in Libya

Military planes loyal to Libya's recognised government attacked on Sunday an opposing force that is seeking to seize the country's two biggest oil ports, officials said.

Port Workers in Argentine Grain Hub End Strike

Port workers in part of the Argentine grains hub of Rosario lifted a work stoppage on Friday, only a day after they went on strike over demands for higher year-end bonuses, a union official said.

Port of Houston Expecting Record Year

The Port of Houston Authority is expecting 2014 to close as a banner year for the port, with 34 million tons of cargo handled through November, Executive Director

Finance

Oil is on the Rise

Oil prices rose in early trading on Monday as Asian markets opened strongly into a holiday-shortened week and as consensus spread that Brent crude prices would

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

US Plans to Shut Royalty Loophole on Coal Exports

U.S. coal companies will no longer be able to settle royalties at low domestic prices when they make lucrative sales to Asia according to reforms proposed by the Interior Department on Friday.

News

Port Workers in Argentine Grain Hub End Strike

Port workers in part of the Argentine grains hub of Rosario lifted a work stoppage on Friday, only a day after they went on strike over demands for higher year-end bonuses, a union official said.

Madsen to Chair Norway’s Research Council Executive Board

Henrik O. Madsen appointed chairman of the executive board of the Research Council of Norway   DNV GL president and CEO Henrik O. Madsen was appointed as chairman

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

 
 
Maritime Security Offshore Oil Pipelines Pod Propulsion Port Authority Salvage Ship Repair Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2978 sec (3 req/sec)