Citigroup withdraws from metals financing in mainland China
US bank Citigroup says it has withdrawn from metals financing in mainland China after suspected fraud that led to a web of lawsuits.
US bank Citigroup says it has withdrawn from metals financing in mainland China after suspected fraud that led to a web of lawsuits.
Last month, Citigroup failed in a bid to win an order from a London court to force trade house Mercuria to pay about US$270 million in potential losses for metals financing deals on the mainland hit by the suspected fraud.
"There's no question that when we look at a situation like that, we do a lot of analysis about who we are doing business with, where we're doing business and what kind of transactions we do," said Jim Cowles, the bank's chief executive for Europe, the Middle East and Africa. "That has led us to examine each one of those areas and we've made changes accordingly."
A bank spokesman said it no longer had any metals financing business in mainland China.
The complex court case was one of a web of legal actions filed in the wake of a probe mainland authorities launched in May last year into suspected fraud at Qingdao port, the world's seventh busiest, and nearby Penglai.
The alleged fraud is estimated to have stung Western banks and trading houses as well as Asian banks for more than US$3 billion in total, according to industry sources.
Neither Citigroup nor Mercuria Energy Trading is accused of fraud but both have been caught in the fallout from the probe.
