Shanxi Coal takes Decheng to court over payment issues

Shanxi Coal Imp&Exp Group Co Ltd, the trading arm of the Shanghai-listed Shanxi Coal International Energy Group Co Ltd, said on Friday that it would file a 1 billion yuan ($160.51 million) lawsuit against Qingdao Decheng Resources Co Ltd, the company at the center of a high-profile commodity financing fraud at the Port of Qingdao, for missed payments.

Shanxi Coal said it was suing Decheng along with five other related parties, claiming that they owe the company $120.4 million and 352.5 million yuan in contract payments. In a filing to the Shanghai Stock Exchange, Shanxi Coal said that it had entered into a series of agreements with Decheng from July 2012 to December 2013 to act as the latter's proxy for the import, re-export and domestic sales of commodities including alumina and electrolytic copper, which have a wide range of industrial uses.

Shanxi Coal claimed that it had been directed by Decheng to sell its imports specifically to Kwang Nam (Hong Kong) Co Ltd and the Hong Kong-based New Team International Holdings Ltd, which are also accused in the lawsuit, but the two companies failed to make the payments.