Citic warns of fallout from Qingdao probe

[HONG KONG] Citic Resources Holdings Ltd said yesterday that metal it owns at Qingdao port may be affected by a probe into suspected fraud, the latest firm caught up in a scandal that has raised broader worries about the risks of metal financing in China.

The probe at the Chinese port, where a third-party firm is suspected of using single cargoes of metal multiple times to obtain financing, has also shaken markets amid fears the problems could extend to other ports and force a crackdown on using metal as collateral for finance.

The investigation into the status of aluminium and copper products stored at the world's seventh-biggest port may hit the group, Citic Resources said, sending its shares down by more than 8 per cent to their lowest since May 7.