Chinese metals traders have racked up losses totalling at least one billion yuan (S$183 million) after one of their counterparties fled the country, leaving deals unfinished, alarming top regulators worried about hidden financial risks.
At the heart of the crisis is a trading network facilitated by Xu Maohua, a metals dealer nicknamed The Hat.
State-backed SDIC Commodities was the highest-profile participant.
Regulators have been particularly bothered by so-called circular trading, where companies buy and sell the same asset among themselves to create the illusion that revenue has been generated.
SDIC Commodities is a trading unit of State Development & Investment, a government conglomerate with annual sales of nearly 200 billion yuan.
Source: Bloomberg
https://www.businesstimes.com.sg/intern ... lees-china
