Mitsubishi Halts Metal Trading in China after Suspected Copper Fraud

SEATTLE (Scrap Monster): Japanese trading house Mitsubishi Corp has decided to stop domestic metal trading activity in China after suspected fraud by a copper trader led to a loss of 13.8 billion yen ($87.5 million), a spokesperson said on Tuesday.

Mitsubishi booked the loss from its Chinese trading operations in the quarter from July to September, which it said related to a client's default on payment in a copper deal.

"We have decided to discontinue new domestic metals trading transactions in China after reassessing the local trading structure and market environment changes," the spokesperson said.

The Shanghai trader responsible was dismissed after the company uncovered a serious breach of trust, with criminal charges being filed against the individual, the spokesperson added.

The changes to the metal trading operations in China will incur costs of less than 1 billion yen, the spokesperson said, but gave no details of changes, such as whether Mitsubishi Corporation RtM China would be closed.

Mitsubishi will continue metals business with Chinese clients through other entities such as Mitsubishi Corp RtM International, its global mineral resources trading hub in Singapore, and its Japan unit, the spokesperson added.

Earlier, Bloomberg said Mitsubishi planned to shutter its Chinese metal trading business after suspected fraud by a copper trader led to a loss of more than $90 million.

Courtesy: www.reuters.com