Dezheng Resources, a mining and trading company, and its affiliates are suspected of borrowing more than USD 2.57 billion from 18 Chinese banks using the same stockpiles of metals stored at Qingdao Port, the 21st Century Business Herald (21st CBH) reported, citing unnamed sources.
One of Dezheng's subsidiaries also took out 17 loans from six foreign lenders over the last decade, it said.
Among the domestic lenders, the state-owned Export-Import Bank of China and Bank of China were the group's biggest providers, loaning it 2.2 billion yuan and two billion yuan respectively, it said.
"Virtually all the local banks in Qingdao and banks that have branches in Qingdao are involved, because companies like Dezheng had been regarded as quality clients and everybody fought with each other to lend to them," the report quoted a manager with a "big state-owned bank" as saying.
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Some were linked to Decheng Mining, a subsidiary of Dezheng, it added.
Chen Jihong, head of Dezheng and a Singaporean passport holder, has been detained by Chinese authorities, the 21st CBH said.
Qingdao Port International, the port operator, said in a filing to the Hong Kong stock exchange earlier this month that Chinese police had asked it to assist a fraud investigation relating to aluminium and copper products stored at the port.