China "kidnapping" alleged as markets turn scrappy

Fri Oct 31, 2008 6:30am EDT
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By Lucy Hornby

BEIJING (Reuters) - A British scrap metal trader says he was abducted and held for several days by his Chinese customers in a type of business dispute that could increase as falling prices tempt companies to default.

Anil Srivastav of Goldarrow Metals Ltd said he was detained for several days while seeking $1.2 million in payment from customers in Ningbo, eastern China.

According to a letter from Goldarrow seen by Reuters, James Xu, a representative of its client Ningbo Yibao, detained Srivastav at the Ningbo Sheraton after quarrelling at a container terminal over the contents of an earlier scrap shipment.

Srivastav escaped out the back door of the Sheraton and fled to the Pudong airport, where he was caught and detained for a few days at a different hotel.

Goldarrow says it forwarded shipping documents to release $350,000 of goods in order to secure Srivastav's release.

Yibao's lawyer said another scrap trading company, Zhenhai Guanghe, was involved and that Yibao was not aware of it.

"James Xu's wife works for Zhenhai Guanghe. The company thinks that James should not mingle with another company's business," said Richard Xu of Zhejiang Flower & May Law Firm.

"We will take further legal action, namely suing Goldarrow."   Continued...