Share

Standard Bank has $170m exposure to China

Hong Kong - Standard Bank said it has a total exposure related to China's Qingdao port of about $170m worth of aluminium, and has started legal proceedings in Shandong province to protect its position.

Standard Bank [JSE:SBK] is the third company to say it has started legal action to recoup losses since Chinese authorities 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.

The bank, a subsidiary of Standard Bank Group [JSE:SBKP], said in a statement on Thursday it also has an exposure of $40m worth of aluminium at other bonded warehouse facilities in Shandong province and has started legal proceedings to secure its position.

Standard Bank had about 80 000 tonnes of aluminium in Qingdao Port and about 20 000 tonnes of the metal at the nearby Penglai Port, said a source familiar with matter.

A spokesperson for the bank declined to comment on the volume.

Despite the emergence of another port in this scandal, trade and bank sources who have checked inventories at terminals across China said the scandal remains as an isolated incident centred on Decheng, which also used storage facilities at Penglai Port in Shandong province and another terminal in the northern Liaoning province.

As details of the potential fraud become clearer, more companies, including Citic Resources Holdings Ltd and China's Shanxi Coal International Energy Group, have begun to launch legal proceedings and announced their potential exposure.

Wanxiang Resources, a commodities trading arm of Wanxiang Group, has also been hit by the alleged fraud and has filed a lawsuit against Decheng Mining in a Shanghai court, said a source with direct knowledge of the matter.

Wanxiang Resources declined to comment.

Standard Chartered Bank said last month its total commodity-related exposure around China's Qingdao port was about $250m. It did not say if it has started legal proceedings.

The exposure of foreign banks and various trading firms, including Citic and Mercuria Energy Trading SA, could amount to more than $680m, according to an aggregation of amounts in company statements and reports.

Local media said Decheng and its parent owed Chinese banks at least $2.58bn.

Standard Bank said the financial impact of its exposures were still being assessed and would be addressed in the group's interim results on August 14.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.91
+0.1%
Rand - Pound
23.87
+0.1%
Rand - Euro
20.37
+0.3%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders