(Adds details, background)
HONG KONG, July 14 Standard Chartered PLC
is suing Chen Jihong, the Chinese businessman at the
center of a suspected fraud at China's Qingdao port, joining a
list of firms that have taken legal action to reclaim their
Standard Chartered is the fourth company to say it has
started legal action to recoup losses since Chinese authorities
launched an investigation into whether a private metals trading
firm, Decheng Mining and its related companies, used fake
warehouse receipts at Qingdao Port to obtain multiple loans
secured against a single cargo of metal.
Valerie Tay, a spokeswoman for the bank, confirmed that the
bank has started legal proceedings against Chen.
The bank is suing for $35.6 million plus costs and interest,
according to the court documents reviewed by Reuters on Monday.
The amount is significantly smaller than its previous
announcement last month that its total commodity-related
exposure around China's Qingdao port was about $250 million.
Other firms that have launched legal proceedings include
Standard Bank Plc, Citic Resources Holdings Ltd and
China's Shanxi Coal International Energy Group.
Standard Bank said its total exposure to metals at Qingdao
port was about $170 million and it also has an exposure of $40
million worth of aluminium at other bonded warehouse facilities
in Shandong province.
A native of southern China's Guangdong province who has
since taken Singaporean citizenship, Chen is chairman of
Qingdao-based Dezheng Resources Holding Co Ltd, which is the
parent company of Decheng.
Western banks such as Standard Chartered, HSBC and
BNP Paribas, which face restrictions in the domestic
loan market in China, are active in the metals financing
business where they give companies ready access to short-term
credit in exchange for goods.
(Reporting by Lawrence White; Additional reporting by Fayen
Wong in SHANGHAI and Nikki Sun in HONG KONG; Editing by Matt