IN a breakthrough deal which could end one of the major debt disputes between Chinese and Western companies, CITIC Shanghai has reached an amicable settlement with US investment bank Lehman Brothers.
The two were in dispute over trading losses on the London Metal Exchange. The settlement paves the way for similar deals with 11 other foreign brokers.
The subsidiary of China's largest investment conglomerate, China International Trust and Investment Corp (CITIC), sealed the deal after a third visit to London this week by acting president Xu Shiwei. The settlement staved off a quarrel that threatened to taint the credibility of leading Chinese companies as players on the international business scene.
Analysts believe settlements with other parties, including Merrill Lynch, and Credit Lyonnais Rouse, are now in the offing.
CITIC Shanghai incurred losses of more than $42 million on trading of base metals after four of its staff carried out illegal trading on the metals exchange. The four - two dealers and two managers - have been arrested.
The head of Lehman Brothers in Hong Kong, Jarett Wait, said: 'We are totally pleased with the settlement.' The US investment bank is one of the key foreign parties in the dispute.
