| SHANGHAI, June 10
SHANGHAI, June 10 China's Qingdao Port Authority
and the city's police are investigating a private metals trading
firm, Decheng Mining, over a suspected metal financing scam at
the port, two police sources with direct knowledge of the matter
The probe at the port, the world's seventh largest, is
examining whether warehouse receipts were duplicated so that a
cargo of metal could be used multiple times to obtain financing.
The investigation has hit metal prices over fears that the
investigation could spread to other ports and prompt a crackdown
on using metal as collateral for finance.
"Decheng is under investigation for its financing activities
at Qingdao Port," a police officer involved in the investigation
told Reuters. The officer asked not to be identified as he was
not authorised to speak to media.
A second police officer also said the company was being
investigated over a fraud investigation.
Decheng Mining is a unit of Dezheng Resources Holding Co
Ltd, a Qingdao-based firm whose chairman is Singaporean Chen
Trading company sources and bankers who have previously
dealt with Decheng said Chen had been detained by authorities
since late April over the investigation. It was not known
whether any charges had been laid or if other companies or
individuals were also being investigated.
Singapore's Ministry of Foreign Affairs (MFA) declined to
comment on whether Chen had been detained but said it was
monitoring the situation.
"MFA is aware of the case and is rendering consular
assistance to Mr Chen and his family," an MFA spokesman said.
Singapore-registered Zhong Jun Resources, an associate
company of Decheng, did not respond to a series of calls
requesting comment. Chen is a director of Zhong Jun.
According to Zhong Jun's website, Dezheng Resources
specialises in mineral resources, as well as trading, production
and processing of metals, including aluminium, copper and zinc.
A Reuters reporter at Decheng's office in Qingdao on Friday
saw three uniformed police at the building, who spent about
three hours looking at documents before leaving with a computer.
A staff member at Decheng Mining's Qingdao office, who would
only give his surname as Liu, would not comment on the police
investigation or Chen's whereabouts.
A woman, who said she was Chen's wife, said by telephone
from the executive's house in Singapore that she had not heard
from her husband in many weeks and did not know where he was.
She also said she did not know if her husband had been detained.
(Additional reporting by Polly Yam in HONG KONG, Melanie Burton
in SYDNEY and Rachel Armstrong in SINGAPORE; Editing by Ed
Davies and Amran Abocar)