Headlines

Large banks and trading firms are frantically trying to determine whether they have fallen victim to a suspected commodities fraud emanating from the giant Qingdao Port in northeast China, the International New York Times DealBook blog reported. Citigroup and several other large Western banks are concerned that their loans may lack the appropriate collateral, big stockpiles of copper and aluminum at the port. The banks have inspectors on the ground who are trying to assess whether enough of the metals are there.

British coal producer Hargreaves Services has withdrawn a loan offer to rival miner UK Coal saying it could not agree to a loan plan with other parties discussing the managed shutdown of UK Coal, Reuters reported. UK Coal, Britain's largest coal producer, went into administration last year and its business has since deteriorated further due to competition from cheaper coal producing markets and the strength of the pound because it is paid in dollars. Hargreaves Services had been in discussions to provide UK Coal with a 5 million pound ($8.4 million) loan.

The group of Pescanova’s creditor banks known as G7 intends to start express insolvency this week in the Spanish Galician multinational firm’s subsidiaries, FIS reported. Sources close to the bank said it is necessary to carry out this process "soon," the newspaper Faro de Vigo reported. For the banks, the documentation is "almost ready" for all the Spanish subsidiaries – except for Insuiña SL and Sémolas del Noroeste SA (HASENOSA) – to be declared as undergoing creditors’ meeting.

In a highly controversial move, the Justice Ministry of Latvia has scrapped former Justice Minister Janis Bordans' submitted reforms to straighten out the insolvency administrator system in Latvia, LETA was informed by Justice Ministry Parliamentary Secretary Gaidis Berzins (VL-TB/LNNK), The Baltic Course reported. Berzins added that these reforms will be put forward in a different bill in the near future. Asked whether in such a way All for Latvia!-For Fatherland and Freedom/LNNK is not attempting to delay these reforms, Berzins denied this.

A surge in business loans to the slowing mainland Chinese economy has prompted Hong Kong regulators to impose strict financial rules four years before they are required under new global standards, the International New York Times DealBook blog reported. The move is aimed at discouraging banks in Hong Kong from raising money by relying too heavily on short-term funds that can evaporate during periods of tumult. But big global banks have been resisting, over fears that the rules will cut into their profit by driving up loan costs.

Prime Minister Matteo Renzi’s government can’t impose a cap aimed at reining in state salaries on Bank of Italy officials’ pay as that would compromise the independence of the institution, European Central Bank President Mario Draghi said, Bloomberg News reported. “Member states may not seek to influence the members of the national central banks’ decision-making bodies by amending national legislation affecting their remuneration,” said a May 26 opinion of the ECB Governing Council signed by Draghi, a fomer Bank of Italy governor.

Cyprus is set to become the latest peripheral eurozone country to return to global debt markets just one year after its controversial €10bn bailout by international lenders, the Financial Times reported. The island state has hired five banks to set up meetings with possible investors in a new sovereign bond as government borrowing costs across peripheral Europe continue to fall to record lows. Although the country issued €100m of six-year bonds through a private placement in April, this will be the first formal bank-managed bond issue since its rescue.

Nexus Energy shares have slumped as much as 29 per cent on the likelihood that the contentious $26.6 million takeover offer from Seven Group Holdings would be voted down by shareholders, forcing the oil and gas junior into administration and potentially handing control of its key asset to oil major Royal Dutch Shell, The Sydney Morning Herald reported. Proxy votes on the scheme of arrangement for Seven Group's 2¢-a-share takeover were due by 11am Tuesday ahead of voting at a shareholder meeting in Melbourne on Thursday.

Malaysia will unwrap plans to restructure loss-making Malaysian Airlines within six to 12 months, a state investor said, as a slump in business since the disappearance of Flight MH370 leaves the carrier set to exhaust its cash reserves by mid-2015, Reuters reported. Moves to rescue Malaysian Airline System Bhd (MAS) have been expected by investors since ticket sales slumped after the unexplained loss of MH370 on March 8. Already squeezed into three years of losses by intense local and longer-haul competition, MAS turned in its worst quarterly performance in two years in January-March.

Veris Gold Corp., which owns Jerritt Canyon, filed for bankruptcy protection Monday in the U.S. and Canada after the Deutsche Bank AG, London Branch claimed the company was in default, the Elko Daily Free Press reported. These filings also follow Veris Gold laying off nearly 60 people at the Jerritt Canyon complex last week. Veris Gold said the Supreme Court of British Columbia issued an order Monday granting “the company’s application for creditor protection under the Companies’ Creditors Arrangement Act.” Veris Gold has its headquarters in Vancouver.