What’s new: Dutch bank ING is suing China’s largest bank for losses suffered in copper deals in 2022 and is seeking $171 million in damages.
ING alleged that Industrial and Commercial Bank of China (ICBC) breached contract terms by releasing export documents for copper transactions involving China’s biggest copper trader Maike Metals International Group Co. Ltd. without collecting payment from the buyer, according to a court filing seen by Caixin.
Under the contract terms, ICBC should have released the export documents only after it received a $171 million payment from Maike, which bought the copper from Triway International Ltd., a wholly owned subsidiary of Maike based in Hong Kong.
Maike banked with ICBC and Triway with ING, but Triway did not receive payment and ING had been financing the deal, the Financial Times reported, citing one person close to the Dutch lender.
The Hong Kong High Court held a hearing on the case April 12. Caixin learned from sources that ICBC responded to the lawsuit and may raise objections over jurisdiction.
The background: Private company Maike handles nearly one-third of China’s refined copper imports. China’s rigid Covid-control policies hamstrung its sprawling real estate and copper import businesses, and the company suffered a liquidity crisis since late 2022. It is undergoing a restructuring that has disrupted the country’s copper trade with global mining giants such as Glencore and BHP.
In February, Maike was sued by a state-owned client for 1 billion yuan ($148 million) due for undelivered contracts.
In October 2022, the head of ICBC’s Shaanxi branch was removed from his position. His removal was related to the lender’s international and trade financing businesses and may be related to some local private companies, Caixin learned from sources. Maike is the bank’s major client.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
Get our weekly free Must-Read newsletter.
