China’s largest bank is being sued by Dutch lender ING for losses suffered in a batch of copper deals in a case that highlights the risks of servicing the scandal-plagued world of commodity trading, reports the Financial Times. Amsterdam-based ING is claiming $170 million in damages from Industrial and Commercial Bank of China (ICBC), alleging it breached contract terms by releasing export documents for copper transactions without collecting payment, according to a Hong Kong court filing seen by the Financial Times.
That resulted in ING booking losses on metals sold to China’s biggest copper trader Maike Metals International by Triway International, a fully owned subsidiary of Maike based in Hong Kong. Maike banked with ICBC and Triway with ING, but the latter trader did not receive payment and ING had been financing its deals, according to one person close to the Dutch lender.
ICBC’s alleged breach of contract happened just before Maike declared a liquidity crisis last September when it said it would have to sell assets and shareholdings as it became low on cash.