Exclusive: Marubeni says Chinese authorities detain three staff at grain unit
By James Topham and Niu Shuping
TOKYO/BEIJING (Reuters) - Three employees at one of Marubeni Corp's (8002.T: Quote) grain trading units in China have been detained by authorities, the Japanese trading house said on Thursday, a move industry sources said was prompted by allegations of tax evasion on soy bean imports.
The employees worked at a Chinese unit of Marubeni's Columbia Grain, Inc, a spokesman at Marubeni said, adding he did not know why they had been detained.
Japan's chief cabinet secretary, Yoshihide Suga, said none of the detained staff at the unit were Japanese citizens.
The detentions come amid a wave of soybean defaults in China, where a combination of poor crushing margins and difficulty getting credit has led to a spike in rejected cargoes.
U.S. soybean futures hit their lowest since April 14 on Thursday, on concerns about defaults by importers in China, which buys more than 60 percent of global imports. The market has lost 3.5 percent in five straight losing sessions.
Industry sources said the allegations of tax evasion were related to discrepancies on the reported valuation of imported soybean cargoes, which would affect customs duty and value-added tax, since both are levied based on the cargo values.
The extent of the investigation in China was not immediately clear but the sector, which has seen traders use soybean imports as a way to secure cheaper financing for other investments, has suffered a series of defaults. Beijing has previously cracked down on similar trading practices involving other commodities such as iron ore and copper.
The probe into Marubeni's China unit also comes days after the seizure of a bulk carrier owned by Japan's Mitsui O.S.K. Lines Ltd (9104.T: Quote) in a case related to a wartime claim. Mitsui has paid almost $30 million to Chinese claimants and the ship was released, a Chinese court said on Thursday. Continued...