QINGDAO Port Authority and the city’s police are investigating a private metals trading firm, Decheng Mining, over a suspected metal financing scam at the port, two police sources with direct knowledge of the matter said.

    The probe at the port is examining whether warehouse receipts were duplicated so that a cargo of metal could be used multiple times to obtain financing.

    The investigation has hit metal prices over fears that the investigation could spread to other ports and prompt a crackdown on using metal as collateral for finance.

    “Decheng is under investigation for its financing activities at the Qingdao port,” a police officer involved in the investigation said.

    A second police officer also said the firm was being investigated over a fraud investigation.

    Decheng Mining is a unit of Dezheng Resources Holding Co., a Qingdao-based firm whose chairman is Singaporean Chen Jihong.

    Bankers who have previously dealt with Decheng said Chen had been detained by authorities since late April over the investigation. It was not known whether any charges had been laid or if other companies or individuals were also being investigated. (SD-Agencies)