STANDARD CHARTERED SUES METAL TRADER FOR $35.6M

Standard Chartered sued Chen Jihong, the owner of a metalstrading company at the centre of a loan fraud investigation in eastern China, for $35.6m the bank says it’s owed under a loan agreement.

Bloomberg News reports that the bank is also claiming interests and costs under the $40m loan facility, according to a July 8 lawsuit filed at Hong Kong’s High Court.

Banks are examining lending linked to metals at Qingdao port amid concern that risks are more widespread in China, where traders use commodities from iron ore to rubber to get funding. Decheng Mining pledged the same metals stockpile three times over to obtain more than $435m of loans, a person briefed on the matter said earlier this month, citing preliminary findings of an official investigation.

Standard Chartered’s total commodity-related exposure in the Qingdao area is around $250m, Chief Executive Officer Peter Sands said on June 26. The loan facility agreement formed with Chen was dated August 26, the company said in the lawsuit.

To access the complete the Bloomberg News article hit the link below:

Standard Chartered Sues Decheng’s Chen for $35.6 Million