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| Mitsubishi |
Mitsubishi Corporation has ceased domestic metal trading operations in China following a significant loss caused by suspected copper fraud. The decision comes after a Shanghai-based trader was found responsible for a serious breach of trust, leading to a loss of 13.8 billion yen ($87.5 million).
Fraud Unveiled: Losses and Legal Action
Mitsubishi Corporation booked the loss during the July-September quarter, citing a client’s default on payment in a copper deal. After uncovering the fraud, the Shanghai trader involved was dismissed, and criminal charges have been filed against the individual.
Operational Restructuring and Future Plans
In response, Mitsubishi announced a halt to new domestic metals trading in China, citing a reassessment of local trading structures and market conditions. While the company anticipates costs of less than 1 billion yen to restructure its operations, no details were provided about the future of Mitsubishi Corporation RtM China.
Despite the changes, Mitsubishi will continue serving Chinese clients through its global trading hub, Mitsubishi Corp RtM International in Singapore, and its Japan-based unit. This strategy aims to maintain the company's strong presence in the global metals market.
This incident highlights the risks of fraud in the trading industry and underscores the importance of robust compliance and trust in global operations.
