Mitsubishi Quits China Metal Trading After Copper Fraud

Japanese conglomerate Mitsubishi Corp. plans to shut down its Chinese metal trading operations following suspected fraud by a copper trader that resulted in a loss exceeding $90 million, Alfred Cang and Koh Yoshida reported for Bloomberg News.

The company will cease buying and selling refined metals and mineral resources in China's spot market and will no longer provide related services to local companies. I Photo: Mitsubishi Corporation

The company will cease buying and selling refined metals and mineral resources in China's spot market and will no longer provide related services to local companies, according to sources familiar with the situation.

However, Mitsubishi's imports and exports on behalf of Chinese clients, managed from outside the country, will not be affected, the sources added.

The fraud involved Gong, a Chinese national and trading manager at Mitsubishi Corporation RtM China. He allegedly made unauthorized deals with local companies, including some linked to him.

Mitsubishi reported a 13.8-billion-yen loss (~$92 million) in its Chinese trading business in its November quarterly earnings.

The company confirmed in December that the loss stemmed from the actions of the Shanghai-based trader, who has since been dismissed.

A Mitsubishi representative confirmed Tuesday that the company would not initiate any new domestic transactions in China but would continue trading with China through other units.