Mercuria claims Citi 'acted fraudulently' by calling for early repo payment on Qingdao metal

Citigroup “acted fraudulently” when it called for early repayment on its repo deals with Mercuria and delivered warehouse receipts for metal held at Qingdao without being certain of the metal’s existence, according to claims made by Mercuria’s lawyer in the high court in London.

Graham Dunning QC made the statement during Mercuria’s closing remarks in the case between Citi and the trading house over which company should face the $270 million exposure from financing deals linked to metal held at Qingdao, revealed after Citi called for early repayment on repo deals following the discovery of fraud at the port. Citi has vigorously defended the litigation, and Mercuria has not made any formal allegations of fraud in the court case. Citi has argued that it was within its contractual rights when it delivered the receipts back to Mercuria and demanded repayment after news of the Qingdao incident broke. But when Citi sent blank warehouse receipts for the delivery metal and demanded early repayment on its repo deals, it did so without any certainty over the existence of any particular...


Chloe Smith

December 09, 2014

15:46 GMT