Standard Bank: Over R2bn exposure to Chinese aluminium fraud
Standard Bank's share price took a knock this morning as it emerged that the bank's troublesome London operation is exposed to the Qingdao Port fraud in China. The bank is in the process of selling its UK operation to its biggest shareholder, China's ICBC Bank, a deal which cannot come too soon for the new executive management team at the Johannesburg-headquartered group. In a voluntary statement on SENS this morning, the bank says its total exposure to aluminium stocks in Chinese bonded warehouses is $210m . – AH
Standard Bank 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.
A spokesman 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.
Local media said Decheng and its parent owed Chinese banks at least 16 billion yuan ($2.58 billion).
Standard Bank said the financial impact of its exposures were still being assessed and would be addressed in the group's interim results on Aug. 14.