State f outdoor toys irms’ oil options trading investigated
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State firms’ oil options trading investigatedPublished: 07 Sep 2009 13:02:01 PSTChina’s State asset watchdog said yesterday it was looking into some State firms’ oil option trades and would encourage these firms to use legal measures to deal with trading partners to minimize potential losses.The statement followed a report last week that the State-owned Assets Supervision and Administration Commission (SASAC) had sent legal letters to six foreign banks that State-owned enterprises (SOEs) reserved the right to default on some derivatives contracts.The report provoked anger and dismay among investment bankers, who fear such a step could set a damaging precedent by allowing State firms to just walk away from loss-making commodity derivative trades.In its statement yesterday, SASAC confirmed that some SOEs had previously sent the letters to their trading partners about oil structured options trades."[The letters] say that [some State firms] will reserve their rights of recourse as this particular business is currently under internal investigations," SASAC said.The agency did not specify the names of State firms and their trading partners involved in the issue.A Singapore-based bank source told Reuters last week that Air China, China Eastern and shipping giant COSCO had issued almost identical notices to their foreign investment banks.Major global providers of commodity risk management such as Goldman Sachs, UBS, Morgan Stanley and JPMorgan were not immediately available for comment."This is a very normal action for companies to use legal tools to safeguard their deserved rights in commercial activities and SASAC is paying close attention and offering attentive support," the agency said."[SASAC] will support companies to minimize losses and protect rights through negotiations and holdings management. We also reserve the rights to launch legal suits," the watchdog added.The agency repeated that it would ban State firms from making speculative derivatives trades and warned that State firms should choose trading partners carefully to steer clear of complex products.SASAC’s warning follows a series of measures by Beijing this year to crack down on the sale of derivative products by foreign banks to Chinese enterprises who bought protection against higher prices last year only to watch the market collapse—leaving them with losses.Reuters Explore the World, Understand China!Please log on http://www.gloaltimes.cn弹簧 kitchen cabinets for sale Rift platinum 短信群发 ショッピング枠　現金化 风机 現金化 rta kitchen cabinets passenger elevator