(Reuters) - HSBC last week became the latest company to initiate legal action in connection with the suspected metals financing fraud at China's Qingdao port, signaling losses could climb from the events 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.
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 $880 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.
- 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 said last month it has about $280 million in loans tied to commodities in two ports at the center of the scandal. That is a big portion of its roughly $400 million worth of commodity financing deals in China.
- CITIC Australia, a unit of 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 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.
- Standard Bank Group said last month it has a total exposure related to the Qingdao port of about $170 million worth of aluminum and has started legal proceedings in Shandong province. It also has an exposure of $40 million worth of aluminum at other bonded warehouse facilities in Shandong province and has started legal proceedings to secure its position.
- Mercuria had alumina worth about $44 million stuck at Qingdao port, according to four banking sources with direct knowledge of the situation.
- 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.
- Singapore-listed warehouse company GKE Corporation Ltd , 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)