China warehouse probe may help LME
Jun 10, 2014 | 12:03 PM
| Andrea Hotter
NEW YORK An investigation into alleged fraud involving copper and aluminum at the Chinese port of Qingdao could be the trigger to push a network of London Metal Exchange warehouses across China back up the agenda.
The probe into alleged fraud relates directly to the possibility that warehouse receipts for metal stored in a section of the port were falsified and issued multiple times in order to raise capital.
While one can never say never, its a situation that would be highly unlikely to happen within the LMEs warehouse network, primarily due to LMEsword, the exchanges system for recording the ownership of LME warrants.
With this system, warrants are essentially placed with a central depository appointed by the exchange, which records the particular warrants that are held on behalf of identified account holders. Each warrant is produced to a standard format and includes a unique barcode.....
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