Police probe Sinoma's missing steel documents
Investigation launched into disappearance of bank paperwork backing steel trades
Sinoma International Engineering, the world's biggest producer of cement equipment, has called in mainland police to investigate the disappearance of bank documents relating to 100 million yuan (HK$123 million) in steel contracts, the firm said yesterday.
The Shanghai-listed company supplies cement plants in more than 30 countries.
Sinoma International's wholly owned subsidiary, Sinoma Equipment & Engineering, signed two contracts with steel trading companies, for which Sinoma Equipment created 12 bank acceptance bills totalling 120 million yuan, Sinoma International said.
"Sinoma Equipment did not receive the relevant supplies. After investigating, it found 10 bank acceptance bills totalling 100 million yuan had been lost."
The Ministry of Public Security is investigating the case and has frozen the bills. It is also unclear where another 20 million yuan of supplies are located.
Sinoma International was also taking legal action over three contracts it signed with steel plants, for which it created 11 bank acceptance bills totalling 98.4 million yuan, it said.
The company was rechecking its steel supply contracts and the related bills, and assessing the risks related to them, Sinoma International said.
"We are taking necessary measures including legal means to protect the company's rights," it said.
This year, mainland banks had tightened their supervision of the financing of steel trading companies, resulting in the break-up of the financing chain of some steel traders, Sinoma International said.
"The risks in the steel trading sector have spread to all companies upstream and downstream, which has made a huge impact on Sinoma Equipment, which is mainly engaged in steel trading," the company said.
Sinoma International is a subsidiary of China National Materials Company (Sinoma), a state-owned cement producer listed in Hong Kong. Sinoma International's net profit was 1.56 billion yuan on revenue of 24.89 billion yuan last year, while Sinoma's net profit was 3.96 billion yuan.